Judge rebuffs SBF's requests to raise lack of crypto rules and FTX recovery to the jury

Quick Take

  • A New York district judge pushed back on what Sam Bankman-Fried’s lawyers wanted to present to the jury including the recovery of assets in the FTX bankruptcy and the lack of crypto regulation in the U.S. 

A New York district judge dealt some blows to Sam Bankman-Fried’s lawyers on what could be brought up throughout his trial, including the recovery of assets in the FTX bankruptcy and the lack of crypto regulation in the U.S. 

Judge Lewis A. Kaplan denied Bankman-Fried’s lawyers request to reconsider a part of a previous order to block the former CEO from including evidence regarding the recovery of assets in the FTX bankruptcy proceeding.

“... as the Court already has held, ‘it is immaterial as a matter of law whether the defendant intended to repay [or could have repaid] the misappropriated funds because the offense [wa]s complete where, as alleged here, there is an immediate intent to misapply and defraud,” according to the filing on Wednesday. 

Kaplan also pushed back on whether the lack of crypto regulation could be presented as evidence arguing that it would be of “minimal probative value” and could confuse the jury. 

Kaplan did allow one reconsideration about whether Bankman-Fried could bring up his charitable giving in court, but with a caveat. 

“Reconsideration is granted but, on reconsideration, the Court adheres to its original ruling with this clarification: The government does not object to the defendant's proffer of admissible evidence regarding charitable or philanthropic efforts provided the evidence is presented for a proper purpose, as opposed to attempting to prove lack of a propensity to commit crime or good,” Kaplan said. “Should controversy arise over particular questions, the Court then will rule as appropriate.”


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The trial continues

Former CEO of Alameda Research Caroline Ellison is continuing to take the stand on Wednesday. Ellison told the court on Tuesday that Bankman-Fried authorized the borrowing of FTX customer funds by its sister trading firm Alameda.

Testimony revealed that Ellison deferred to her ex-boyfriend on many critical matters, such as when and how to repay Alameda's lenders, how much capital to commit to venture capital investments, and what to include on balance sheets sent to banks and investors. 

Ellison’s testimony continues on Wednesday. 

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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