March 27, 2024
FTX's ex-CEO legal defense brings FTX terms into focus amidst a trial.
Latest Cryptocurrency News

FTX Former CEO’s Legal Team Pushes for Crypto Exchange’s Terms of Service in Trial

Attorneys representing the former CEO of FTX, Sam Bankman-Fried, are making efforts to introduce specific information from the crypto exchange’s terms of service into witness testimonies. In a filing dated October 12, submitted to the United States District Court for the Southern District of New York, SBF’s legal team stated that the motion aimed to address certain evidentiary issues in the ongoing criminal trial. The core issue revolves around conflicting interpretations between prosecutors and the defense concerning the alleged misuse of FTX funds.

As per Bankman-Fried’s legal counsel, the prosecution planned to summon witnesses and establish their understanding and expectation of how their deposits at FTX would be utilized. In contrast, defense attorneys argued that adherence to FTX’s terms of service serves as a defense against the charges, regardless of users’ comprehension of those terms.

The filing asserted that it is the defense’s position that the rights and obligations of parties to a commercial relationship are not established by their expectations and understandings for purposes of the misappropriation theory of the federal fraud statutes. It further mentioned that the defense anticipates questioning witnesses who were customers, investors of FTX, and lenders to Alameda to gather information about the significant factors they considered when entering the arrangements and transactions under scrutiny in the trial.

The defense team sought the court’s permission to interrogate prosecution witnesses based on FTX’s terms of service while also requesting to prevent lay fact witnesses from testifying. They cited the testimony of Matt Huang, co-founder of Paradigm, claiming that his input represented expert opinion rather than a reflection of everyday lay experience regarding FTX’s services.

The filing criticized the government’s attempt to establish misappropriation through customer and other testimonies regarding their beliefs and expectations, arguing that this approach seeks to bypass the government’s burden of proving an essential element of its embezzlement theory beyond a reasonable doubt. It asserted that customer beliefs about their legal relationship with FTX would only serve to confuse and distract jurors from considering the facts in the context of the Terms of Service.

On October 13, the trial reached its eighth day, with Bankman-Fried pleading not guilty to all charges. This week saw testimony from Caroline Ellison, the former CEO of Alameda Research, who admitted to committing fraud at the direction of Bankman-Fried by providing fraudulent documents and making misleading statements about Alameda’s use of FTX funds.

Zac Prince, the CEO and founder of BlockFi, also testified on the late evening of October 12 and into October 13. His testimony focused on a $400 million credit line that BlockFi provided to FTX US in July 2022, as well as the repercussions stemming from the collapse of Terraform Labs and Three Arrows Capital. The trial is adjourned until October 16.

Image by pixabay

Related posts

Bitcoin Mining Difficulty Reaches All-Time High, Posing Challenges for Miners

Henry Clarke

3Commas on High Alert After Multiple User Accounts Hacked

Robert Paul

zkSync Era Introduces Hyperchains to Redefine Interoperability and Speed in Blockchain

Christian Green

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More