June 14, 2024
Sam Bankman-Fried. Contested testimonies and judicial strategies unveiled.
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Former FTX CEO’s Defense Fights Prosecutors’ Bid to Include Witness Testimonies

The ongoing criminal trial of former FTX CEO Sam Bankman-Fried (SBF) in New York has seen his legal team file motions aimed at preventing testimony from users and investors in the exchange.

In documents submitted to the United States District Court for the Southern District of New York on October 2, SBF’s attorneys opposed the pre-trial motions from prosecutors requesting that FTX customers and investors provide testimony regarding their expectations about how the cryptocurrency exchange would manage their assets. They also sought to block the testimony of an unnamed Ukrainian national, a former FTX user, who would testify through a live two-way video partially based on Sixth Amendment principles.

The filing regarding FTX user testimony emphasized that decisions based on the specific testimony of individual witnesses concerning their understanding of particular statements or aspects of their relationship with FTX or Mr. Bankman-Fried should not be made in a hypothetical manner.

SBF’s legal team contended that prosecutors were attempting to have a double standard by preventing similar witnesses proposed by the defense from testifying about their understanding of how FTX would handle their funds. The defense lawyers argued that the motion was premature, asserting that it should be a matter for the jury to assess. They argued that the government wanted to admit evidence about how customers and other potential victims understood their relationship with FTX only if it was presented by the government but excluded if presented by the defense.

Additionally, the defense raised concerns that allowing the testimony of the Ukrainian witness could refer to hardships and individual circumstances stemming from the Russian invasion of Ukraine, potentially evoking sympathy and outrage from the jury. They pointed out that the ongoing threat of attacks in many parts of Ukraine has made international travel difficult.

The defense lawyers cited the common practice of courts to exclude relevant evidence that might generate sympathy among jurors but is unrelated to the facts of the case. They argued that the circumstances under which the Ukrainian user would testify and the reasons for his absence from the courtroom could themselves be prejudicial. Jurors might speculate about why a Ukrainian national is testifying via video, and the most obvious explanations would likely provoke sympathies that have no bearing on the case’s merits.

These motions were filed shortly before the commencement of jury selection for Bankman-Fried’s criminal trial in New York City. As of now, Judge Lewis Kaplan is in the process of questioning potential jurors regarding any conflicts that might prevent them from serving in the trial, which is expected to extend through November.

Since Judge Kaplan revoked Bankman-Fried’s bail in August, the former FTX CEO has remained largely confined to jail, despite multiple unsuccessful attempts by his legal team to secure temporary release. He is set to face two criminal trials in October 2023 and March 2024, having pleaded not guilty to all 12 criminal charges related to alleged fraud at FTX and Alameda Research.

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