Sam Bankman-Fried may find it hard to argue the fraud charges against him should be tossed because of uncertainty as to how U.S. law treats cryptocurrency, as other high-profile defendants in criminal cases involving digital assets have done. That is because Manhattan federal prosecutors’ charges against the founder of now-bankrupt crypto exchange FTX have largely sidestepped an ongoing debate as to whether cryptocurrencies should be regulated as securities or commodities, legal experts told Reuters. Bankman-Fried, 30, was indicted on two counts of wire fraud and six conspiracy counts last month in Manhattan federal court for allegedly stealing FTX customer deposits to pay debts from his hedge fund, Alameda Research, and lying to equity investors about FTX’s financial condition. He has pleaded not guilty. “It’s a pretty simple deception,” said Shane Stansbury, a professor at Duke University School of Law and former Manhattan federal prosecutor. “You really don’t need to get into the weeds of how we view cryptocurrencies.” The question of whether cryptocurrencies are considered securities, like stocks or bonds, or commodities – a category that in the United States encapsulates foreign currency trading as well as raw materials such as crude oil – remains largely unresolved.
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