Highlights of the crypto court war: Key chain legal developments this week

A document filed in the U.S. District Court for the Southern District of New York on Friday sought to restrict prosecutors 'use of certain evidence in a campaign finance case involving Michelle Bond. Michelle Bond is the wife of former FTX Digital Markets co-CEO Ryan Salam.

Bond's lawyers argued that evidence related to Salam's 2023 guilty plea-although related to her own actions-should not be admitted against her because it risks unfair bias and, in their view, does little directly to proving Bond's subjective perceptions or intentions. The motion also requests the court to consider relevant details of Bond's contemporaneous divorce and custody proceedings.

Core Points

Michelle Bond wants the court to exclude evidence related to Ryan Salam's guilty plea and "relevant guilty material", arguing that the evidence is not probative to his mental state.

The campaign finance charges Bond faces stem from allegations that her donations to the 2022 congressional campaign were influenced by FTX-related activities handled by Salam.

The motion also requests to include information about Bond's divorce and custody proceedings, claiming she is not an "ordinary" donor.

On the other hand, the U.S. Commodity Futures Trading Commission (CFTC) ordered former Rep. George Santos to pay a total of $35,000-of which $17,500 was a civil penalty and $17,570 was a refund of illegal gains-for transactions related to Kalshi's contract to predict market events.

A soldier accused of making more than $400,000 from a Polymarket incident contract related to military operations has asked the Federal District Court for the Southern District of New York to drop the charge, citing ambiguity about how the Commodity Exchange Act definition of "swap" applies to incident contracts.

Bond asked the Federal District Court for the Southern District of New York to exclude Salam's guilty plea from the case

Bond faces campaign finance charges related to her defeat in the New York State Congress in 2022. According to criminal charges, part of her campaign donations were funded through FTX-related channels handled by her husband, Ryan Salam.

In the latest U.S. District Court for the Southern District of New York, Bond's legal team asked the court to bar prosecutors from introducing Salam's guilty plea and related guilty materials. The document points out the core logic of the request: Bond was not tried for Salam's guilty plea, and the defense said the government's use of the materials did not effectively prove Bond's guilt, knowledge or intention.

Bond's lawyers argued that Salam's guilty plea was an admission of his own actions and not evidence of Bond's mental state or participation in the alleged crime. They said the probative value of the materials was far below the risk of unfair bias against Bond.

Prosecutors are expected to highlight the link between alleged campaign finance and personal behavior related to the FTX collapse. However, Bond's motion suggests she seeks to limit the evidence jurors can consider-especially evidence that may affect jurors emotionally or indirectly, rather than strictly proving elements of the charge.

Why the defense initiated divorce and custody proceedings

In addition to the evidence controversy surrounding Salam's guilty plea, Bond's document also requested the court to include information related to her concurrent divorce and custody proceedings while the alleged crime was committed.

Bond's lawyer's position is that her family's living conditions will affect how the outside world perceives her status as a campaign related donor. The documents argue that Bond should not be considered an ordinary personal donor simply because she faces personal charges related to a political campaign, even if she was not married to Salam at the time of the alleged acts.

Whether and to what extent these family law details can be adopted are likely to become key procedural issues. This could affect the overall tone and framework of the case-especially if the government attempts to portray campaign finance as closely related to Salam's network rather than to Bond's independent situation.

George Santos ordered to pay a fine for trading in the Kalshi forecast market

In another development involving the forecast market, the U.S. Commodity Futures Trading Commission (CFTC) ordered former New York Rep. George Santos-who was expelled from Congress in 2023--to pay a total of $35,000. The specific amount is a civil fine of US$17,500 and a refund of illegal income of US$17,570.

Regulators said the action was related to Santos trading event contracts on Kalshi related to whether he would attend a State of the Union speech in Washington, D.C., in 2026. The CFTC said Santos posted social media posts about his plans to attend or not attend the event, which contained "material misstatements and omissions."

According to the CFTC, after the post was posted, the contract price moved in favor of Santos 'position, making him profit of more than $17,500.

In the same order, Santos was banned from trading on prediction market platforms for three years. The order was also made in the context of criminal proceedings: Santos was sentenced in 2025 to 87 months in prison for wire fraud and aggravated identity theft, but after serving only three months, his sentence was pardoned by U.S. President Donald Trump, previously reported.

Polymarket faces motion to dismiss insider trading charges

Another document filed in the Federal District Court for the Southern District of New York, came from Cannon Ken Van Dyke's defense team, who questioned the legal basis for the accusation that he used non-public information to profit from Polymarket's contract.

The U.S. Department of Justice said Van Dyke was involved in a military operation related to the ouster of Venezuelan President Nicolas Maduro in January, and prosecutors accused him of subsequently using inside information to bet on whether Maduro would be overthrown-charges were announced in April. Defense documents say Van Dyke faces alleged profit charges of more than $400,000 in connection with the Polymarket incident contract.

Van Dyke's lawyers filed a 51-page memorandum supporting a motion to dismiss the indictment based on multiple legal theories. One focus is the Commodity Exchange Act's treatment of event contracts as "swaps," which the defense says is vague.

Although the CFTC, under Chairman Michael Selig, claims that by treating event contracts as "swaps," it has "exclusive jurisdiction" over the forecast market, Van Dyke's lawyers say the uncertainty is enough in itself to dismiss at least part of the allegations. In the filing, they argued that if lawmakers, administrative agencies and courts all believed that the definition of "swap" was vague, ordinary citizens could not reasonably be given fair notice that predicted market bets were governed by the Commodity Exchange Act.

According to a timetable submitted in June, the case is expected to enter trial in late 2026 or early 2027, and Van Dyke pleaded not guilty to all charges.

The defense's arguments also went beyond Van Dyke's personal risks. The documents suggest that the ruling could have important implications for lawmakers and government officials who have used prediction markets for political activities or public statements. Previous reports cited in the document show that Trump's teleprompter operators reportedly bet more than $100,000 on Kalshi involving event contracts related to the president's speech, highlighting how prediction markets attract attention from political circles.

In these cases, courts are required to decide what evidence is fair, which definitions apply to crypto-related tools, and how much clarity regulators must provide before individuals may be held criminally liable-issues that could determine the direction of future cryptocurrency and predictive market enforcement.