Sam Bankman-Fried's lawyers challenge customers' testimony on how FTX used their assets

Quick Take

  • The former FTX CEO’s Counsel filed a letter not long before his trial kicked off in New York on Tuesday, where Bankman-Fried faces multiple fraud charges and potentially decades in prison.

Sam Bankman-Fried’s lawyers are contesting prosecutors’ moves to call on customers and investors to testify about how they understood the now failed crypto exchange would use their assets. 

His lawyers’ letter was filed not long before Bankman-Fried’s trial kicked off in New York on Tuesday, where the former FTX CEO faces multiple fraud charges and potentially decades in prison. Prosecutors had previously said they expected some FTX customers to testify about how they thought the exchange would hold their funds and said some FTX investors would testify about how the exchange was a custodian of those customer funds.   

“The motion is premature. Decisions on specific testimony from specific witnesses relating to their individual understanding of specific statements or aspects of their relationship with FTX or Mr. Bankman-Fried cannot be decided in the abstract,” Bankman-Fried’s lawyers said.

If the court does approve prosecutors’ request, the defense should be allowed to cross-examine the witnesses, the lawyers said. 

Letters pile on


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Other letters were filed by Bankman-Fried’s defense ahead of Tuesday’s trial, which is expected to last several weeks. On Monday, his attorneys said prosecutors' request to allow an FTX customer, who is in Ukraine, to testify remotely should be denied, arguing that a face-to-face, in-court testimony is essential. 

Bankman-Fried’s counsel also filed a separate letter on Monday requesting clarification on the court’s previous granting of the DOJ’s request to preclude argument concerning whether FTX was regulated within the United States and FTX.US’s compliance.

Jury selection is expected to start on Tuesday, which experts said is likely to stretch into the remainder of the week. Early next week, the court will hear opening statements, first from the prosecution and then the defense.

Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Sarah is a reporter at The Block covering policy, regulation and legal happenings. Before, Sarah was a reporter with CQ Legal writing about securities regulation, which is where she first started reporting on crypto. Sarah has also written for The Bond Buyer and American Banker, among other finance-related publications. She graduated from the University of Missouri and earned a degree in print and digital journalism. Sarah is based in Washington D.C., and is an avid coffee lover. You can follow her on Twitter @ForTheWynn.


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