The U.S. Department of Justice (DOJ) has said that FTX ads featuring comedian Larry David and American football player Tom Brady show a blurring between the bankrupt crypto exchange’s U.S. and international businesses. Sam Bankman-Fried, FTX’s founder and former CEO, is currently facing charges of wire fraud and has pleaded not guilty. His lawyers have argued that legally separate U.S. operations should be carved out, as accusations relate to the international business. The DOJ, however, has said that the distinction is not so clear-cut, citing a series of ads aired just months before a great crypto crash that eventually took down Bankman-Fried’s empire. “Celebrities are featured in advertisements describing ‘FTX’ as ‘a safe and easy way to get into crypto’ and showing customers using a device displaying the FTX logo, not the FTX.US logo,” said the DOJ filing.
The DOJ also wants to go over the fine details surrounding FTX’s collapse, arguing they’re “inextricably intertwined” with the alleged misappropriation of customer funds. Bankman-Fried has argued he was strong-armed into ceding control of a company that could have returned to financial health, but the government has said events around the bankruptcy are of interest to the jury even if the eventual fate of FTX is not. “Whether customers could be made whole in the future ‘is immaterial as a matter of law,’” the DOJ said. Bankman-Fried’s lawyers have accused the government of effectively circumventing the terms of his extradition from the Bahamas.
The trial is set to start on October 2nd, and Bankman-Fried was recently deemed to breach bail conditions by contacting witnesses and leaking potential evidence to the New York Times. His lawyers have protested that prison conditions are making it impossible to prepare his defense.