Defense in Ex-FTX CEO Sam Bankman-Fried's Trial Calls On Exchange's Terms of Service
Summary:
Legal representatives for ex-FTX CEO Sam “SBF” Bankman-Fried aim to use elements of the crypto exchange's terms of service as part of their defense strategy in the ongoing criminal trial involving alleged misuse of FTX's funds. The defense plans to question FTX's clients and investors about their understanding of these terms, and dismiss an "embezzlement theory" by the prosecution. The eighth day of the trial saw testimonies from former Alameda Research CEO Caroline Ellison, admitting fraud, and BlockFi CEO Zac Prince regarding financial dealings with FTX.
Former FTX CEO Sam “SBF” Bankman-Fried's attorneys are looking to introduce elements of the cryptocurrency exchange's terms of service into witness testimonies. The motion, lodged on October 12 in the U.S. District Court for the Southern District of New York, is intended to tackle "particular evidentiary issues" in the ongoing criminal trial. This legal contest revolves around prosecutors and the defense battling over alleged misuse of FTX's funds.
Bankman-Fried's legal council argues that eyewitnesses plan to be called by prosecution to establish their "perceptions and anticipation" about the use of their deposits on FTX. Defense attorneys suggest that despite users’ awareness of FTX’s terms of service this is a legal protection against the charges brought against them. The defense team's briefing says, "The rights and duties of parties in a business contract are not set by their anticipations and understanding for federal fraud law purposes".
The defense team plans to question customers, investors of FTX, and lenders to Alameda about key points considered whilst entering the business agreements and transactions under examination in this trial.
The defense seeks court permission to cross-examine witnesses based on FTX’s terms of service and exclude testimony from "lay actual witnesses". Referring to Matt Huang of Paradigm’s testimony, the defense argues he offered his "specialist view" rather than "normal lay experience" on FTX’s operations.
The defense, in their filing, claimed, “The Government, by looking to demonstrate misappropriation via the testimony of customers and others concerning their expectations and beliefs, aims to evade its responsibility to provide incontrovertible proof of its embezzlement theory". They added, "Indeed, evidence of customers’ beliefs about their legal dealings with FTX would only create a distraction and bewilderment for jurors when considering the facts in relation to the Terms of Service."
October 13 marked the eighth day of Bankman-Fried’s criminal trial, where he has pleaded innocent to all charges. This week included testimony from Caroline Ellison, former Alameda Research CEO and ex-partner to SBF who confessed to fraudulent actions under Bankman-Fried's instruction with false documents and deceptive statements relating to Alameda using FTX funds. BlockFi founder CEO Zac Prince testified late on October 12 and into October 13 about a $400 million credit facility extended to FTX US in July 2022 and the shockwaves generated by the collapse of Terraform Labs and Three Arrows Capital. The trial will resume on October 16.
Published At
10/13/2023 5:25:45 PM
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