Federal prosecutors revealed part of their slate of witnesses who will testify in the criminal case against disgraced FTX founder Sam Bankman-Fried only days before the high-profile trial is set to start.
In a pair of filings to the court over the weekend, prosecutors said that they plan to introduce testimony from FTX customers and investors affected by the firm’s collapse last November to lay out how they expected the company would take care of their digital assets rather than how they were ultimately used.
"In each of these cases, the anticipated testimony [will be] about how the witnesses understood their relationship with the defendant and his companies," read the prosecutors' filing, adding that the testimony will show “how reasonable persons would have interpreted and understood representations made by [SBF] regarding FTX’s treatment of customer assets and other issues."
Caroline Ellison, Gary Wang Plead Guilty, Cooperating in FTX Investigation
Two of Sam Bankman-Fried's closest former allies have flipped on him. Attorneys with the Southern District of New York announced Wednesday night that it had filed charges against FTX co-founder Gary Wang and the ex-CEO of Alameda Research, Caroline Ellison, securing their cooperation in their investigation into the spectacular collapse of FTX. Meanwhile, the Securities and Exchange Commission separately announced that it was also charging the pair “for their roles in a multiyear scheme to defrau...
In another letter, the government alerted the court that it would use testimony from non-U.S. citizens to testify how they expected their funds would be looked after once they were deposited with FTX. Before its demise, much of FTX’s client base was abroad, with U.S. customers only able to access it through a smaller subsidiary: FTX U.S.
Among those prosecutors want to testify is an unnamed citizen of Ukraine, whom they refer to as “FTX-Customer 1.” They seek the court’s permission to allow this individual to testify remotely because Ukrainian males over the age of 18 are restricted from leaving the country amid its ongoing war with Russia. Prosecutors said that this individual "lost a substantial portion of his life savings that he had entrusted to FTX" after the war started.
Former FTX US President Accuses SBF of ‘Gaslighting and Manipulation’
Former President of FTX US Brett Harrison shared details of his tenure under Sam Bankman-Fried on Saturday, distancing himself from the disgraced crypto mogul who’s been charged with a series of financial crimes. In a flurry of Twitter posts, Harrison accused Bankman-Fried of “gaslighting and manipulation,” claiming he was isolated as a leader while working to build out the defunct cryptocurrency exchange’s presence in the U.S. Harrison stepped down from FTX’s U.S. division in September, just we...
Regarding the unnamed co-conspirators, prosecutors said they will use testimony from "certain witnesses who entered guilty pleas" as well as those granted immunity by the government. Testimony from this group is aimed at showing how they and SBF "agreed to perpetrate the scheme" that led to FTX's failure.
Though left unnamed in the filing, prosecutors have already struck cooperation deals with members of SBF’s inner circle, including FTX co-founder Gary Wang and former head of engineering Nishad Singh. Caroline Ellison, the former CEO of Alameda Research and SBF’s former lover, also struck a deal with prosecutors, and already admitted that she and other executives “knew it was wrong” to use client funds the way they did.
How Sam Bankman-Fried Ended Up in Jail
The nature of Sam Bankman-Fried’s conduct at the helm of FTX will face intense scrutiny at trial, but his alleged behavior after stepping down is what ultimately earned him a spot at the Metropolitan Detention Center (MDC) in Brooklyn in August. A bail agreement meant Bankman-Fried was allowed to prepare his defense against criminal fraud charges under house arrest at his parents' California home. But the sudden change of scenery to a Brooklyn jail came at a crucial time, Kevin O’Brien of Ford O...
For their part, SBF’s lawyers filed objections over the weekend with the court related to the government’s proposed questions for potential jurors.
In their filing, SBF’s lawyers argued that a proposed list of questions from prosecutors was unfair and "prejudicial" to their client. In particular, the defense took issue with prosecutors referring to SBF's actions as "fraud" rather than alleged fraud, and for asking questions that they say are inadequate to weeding out bias from potential jurors.
"We therefore respectfully request that, in addition to the court’s preferred voir dire, the court use the voir dire proposed by Mr. Bankman-Fried... which will provide a full and fair opportunity to expose bias or prejudice on the part of potential jurors,” the lawyers wrote, referring to the legal term for examining potential jurors.
SBF, a once-celebrated crypto mogul, is facing a litany of charges, including money laundering, wire fraud, and illegal political donations, which can mean potential decades in prison if convicted. His trial is slated to start on October 3.
