US judge stays SEC and CFTC cases against FTX’s Sam Bankman-Fried

NEW YORK (Reuters) – A U.S. judge on Monday stayed civil lawsuits brought by two regulators against Sam Bankman-Fried pending the completion of the Justice Department’s criminal case against the founder of now-bankrupt cryptocurrency exchange FTX.

US District Judge Kevin Castel in Manhattan granted a Justice Department request supported by the Securities and Exchange Commission and the Commodity Futures Trading to stay the lawsuits filed by the Commission.

Prosecutors said it made sense to delay those lawsuits because the cases overlapped significantly and the outcome of the criminal case would likely affect remaining issues in the civil cases.

They also cited the risk that Bankman-Fried could gather evidence in the civil trials to improperly charge government witnesses, circumvent criminal investigative rules, and adjust his criminal defense.

Bankman-Fried agreed to stay the civil proceedings.

Stays of SEC and CFTC lawsuits are common when the Justice Department files parallel criminal cases.

Bankman-Fried, 30, is at large on $250 million bail and has been living with his parents in Palo Alto, California since pleading not guilty to billions of dollars looting from FTX. Another Manhattan federal judge, Lewis Kaplan, is overseeing this case.

(Reporting by Jonathan Stempel in New York, editing by Deepa Babington)