Lawyers for disgraced FTX founder Sam Bankman-Fried (SBF) are moving to expand the scope of their questioning for the prosecution’s next round of witnesses after a bruising two weeks of testimony by members of the mogul’s inner circle.
SBF's lawyers raised concerns with what they said were restrictions on their available lines of questioning with government witnesses that they say block them from making a case for their client. To correct this, the defense asked for more room to explore defense theories through cross-examination—and to bar prosecutors from relying on lay witnesses for expert testimony.
“The government has objected to the defense’s effort to ask questions of government witnesses that strayed from the government’s conception, but the defense should not be precluded from ‘fleshing out’ its theories through cross-examination,” the lawyers wrote in their filing.
'He Kept Lying': Prosecutors Unload on Sam Bankman-Fried as Defense Tries to Shift Blame
Fallen crypto mogul Sam Bankman-Fried "stole billion of dollars" in cash and crypto from thousands of people and lied constantly to do so, prosecutors today alleged. In opening statements Wednesday morning at Bankman-Fried's trial, Assistant U.S. Attorney Thane Rehn told jurors that the ex-FTX CEO "knew his company didn't keep customer money safe." He also alleged that Bankman-Fried's company was "built on lies" and that his close business partners knew what he was up to. "He spent other peoples...
This request comes as Bankman-Fried’s trial enters its third week, and following testimony from a parade of witnesses who recounted episodes where they were directed by the FTX chief to mislead investors, clients and auditors on the firm’s health and its relationship with Alameda Research—also founded by Bankman-Fried. Caroline Ellison, Alameda’s CEO and Bankman-Fried’s former lover, emotionally recounted her relief at not having to “lie anymore” after detailing the pressure she said Bankman-Fried put on her to do so.
By shaping the testimony of upcoming witnesses, the defense is likely looking to prevent more damage to Bankman-Fried’s image in the eyes of jurors, said Daniel Silva, a former assistant U.S. attorney and shareholder at Buchalter.
"They don't want more victims," Silva told Decrypt. Victim testimony, he continued, "makes the jury more sympathetic" to the government's case, and Bankman-Fried's legal team may be looking to head that off by creating fences around it. "[Bankman-Fried] is really trying to keep this damaging evidence away from the jury."
Sam Bankman-Fried Has Few Pathways to Acquittal, Say Legal Experts
Nearly a year after cryptocurrency exchange FTX went down in flames, the trial of its disgraced founder Sam Bankman-Fried is set to begin in a Manhattan federal court on Tuesday. SBF—a once-feted wunderkind who often cast himself as an embodiment of responsible stewardship in crypto—faces a litany of charges, including money laundering, wire fraud, and illegal political donations. If convicted, SBF faces potentially decades in prison for his role in the implosion of FTX, forcibly removed from th...
The defense is also gunning for another of the pillars of the prosecutors’ case by attempting to argue that FTX stuck to its terms of service, meaning that it can’t be accused of fraud regardless of others’ understanding of what these meant. This, they hold, is a recognized defense in fraud cases: arguing that FTX complied with its own contract’s terms.
In their own response a day later, prosecutors rejected the defense’s notion as "simply wrong," and asserted that the law is not limited to only breaches of a written contract. They added that their evidence has shown that Bankman-Fried misused client funds and repeatedly misrepresented how FTX was handling them at the same time.
Prosecutors also say they have not objected to the defense’s cross-examination of witnesses, but contested that they were opposing questions designed to suggest they were negligent in their dealings with FTX.
"There is thus no basis to exclude evidence or provide any limiting instruction about evidence of customers’ beliefs regarding their understanding and interpretation of how their deposits would be handled by FTX, in the context of the statements which the defendant authorized about how FTX would treat their assets," said the prosecutors in their filing.
Sam Bankman-Fried Lawyers May Already Be Angling for an Appeal, Says Former Prosecutor
Huddled with Sam Bankman-Fried’s lawyers and prosecutors last week, U.S. District Judge Lewis Kaplan gave the FTX founder’s defense a simple reminder just outside the jury’s earshot. “The goal here is not to set a record for the longest trial,” he said. “It's to have the fairest trial.” After just a few days, Judge Kaplan had honed in on the defense’s use of the clock. In court, it's been a point of contention that Bankman-Fried’s counsel has used its cross-examination of the DOJ’s witnesses to...
Silva said bankman-Fried’s defense team arrived at the trial with steep odds of winning an acquittal, so they are left with a narrower suite of options to attack the government’s case. In contrast, prosecutors still have more room to maneuver to convict Bankman-Fried.
"If there are seven charges right now pending, and three or four different theories on these charges, prosecutors only have to prove one of them, and they can argue for a 20-year max sentence," explained Silva. "In contrast, SBF has to be right on all of them [for acquittal]."
