Turner Wright6 hours agoSam Bankman-Fried’s legal team moves to pursue theory on FTX terms of serviceLawyers petitioned the court to allow them to question witnesses for the prosecution based on FTX’s terms of service, as well as preclude testimony from “lay fact witnesses.”1601 Total views4 Total sharesListen to article 0:00NewsJoin us on social networksLawyers representing former FTX CEO Sam “SBF” Bankman-Fried are seeking to bring up certain information from the crypto exchange’s terms of service during witness testimonies.
In an Oct. 12 filing in the United States District Court for the Southern District of New York, SBF’s legal team said the motion was aimed at addressing “certain evidentiary issues” in the ongoing criminal trial. The issue at stake involves competing theories by prosecutors and the defense team over the alleged misuse of FTX funds.
According to Bankman-Fried’s lawyers, prosecutors intended to call witnesses and establish their “understanding and expectation” of how their deposits at FTX would be used. Defense lawyers claimed that regardless of users’ understanding of FTX’s terms of service, “compliance with those terms is a defense to the charged offense.”
“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,” the filing says, adding: “The defense anticipates asking witnesses who were customers and investors of FTX and lenders to Alameda questions designed to elicit testimony about the factors they considered material in entering the arrangements and transactions at issue in this trial.”Oct. 12 filing by Sam Bankman-Fried’s team in U.S. District Court for the Southern District of New York. Source: PACER
Defense lawyers petitioned the court to allow them to question witnesses for the prosecution based on FTX’s terms of service, as well as preclude testimony from “lay fact witnesses.” They cited testimony from Paradigm co-founder Matt Huang, claiming he offered his “expert opinion” rather than “everyday lay experience” on FTX’s services.
“By seeking to prove misappropriation through testimony from customers and others regarding their beliefs and expectations, the Government is trying to sidestep its burden to prove an essential element of its embezzlement theory beyond a reasonable doubt,” says the filing. “Indeed, evidence of customers’ belief regarding their legal relationship with FTX would only serve to distract and confuse jurors in considering the facts in light of the meaning of the Terms of Service.”
Related:Changpeng Zhao’s tweet ‘contributed’ to collapse of FTX, claims Caroline Ellison
Oct. 13 marked the eighth day of Bankman-Fried’s criminal trial, for which he has pleaded not guilty to all charges. This week, former Alameda Research CEO and SBF’s ex-girlfriend Caroline Ellison testified, admitting to committing fraud at the direction of Bankman-Fried by providing fraudulent documents and making misleading statements concerning Alameda using FTX funds.
BlockFi founder CEO Zac Prince took the stand late on Oct. 12 and into Oct. 13, testifying on a $400-million credit line the firm provided to FTX US in July 2022 and the ripples caused by the collapse of Terraform Labs and Three Arrows Capital. The trial has been adjourned until Oct. 16.
Magazine:Can you trust crypto exchanges after the collapse of FTX?# Law# Court# Crimes# Sam Bankman-Fried# FTX# RegulationAdd reactionAdd reactionRead moreHow to earn passive income with peer-to-peer lendingMichael Lewis" new book puts a positive spin on Sam Bankman-FriedMeet the guerilla artist who staged a crypto ‘rug pull’ in front of the SEC