[1/5]FTX founder Sam Bankman-Fried attends as FBI agent Marc Troiano testifies as Bankman-Fried faces fraud costs over the collapse of the bankrupt cryptocurrency trade, at federal courtroom in New York Metropolis, U.S., October 26, 2023 on this courtroom sketch. REUTERS/Jane Rosenberg Purchase Licensing Rights
NEW YORK, Oct 26 (Reuters) – Legal professionals for FTX founder Sam Bankman-Fried kicked off their case at his fraud trial on Thursday following 12 days of prosecution testimony by which former colleagues on the now-bankrupt cryptocurrency trade mentioned he directed them to divert buyer funds to his hedge fund and deceive buyers and lenders.
Bankman-Fried was anticipated to testify in his personal protection after his attorneys known as two different witnesses, his lawyer Christian Everdell mentioned in courtroom exterior the jury’s presence. The primary two protection witnesses known as have been Krystal Rolle, Bankman-Fried’s lawyer within the Bahamas, and database skilled Joseph Pimbley.
For Bankman-Fried, taking the stand is a dangerous transfer that will give prosecutors the possibility to cross-examine the 31-year-old former billionaire about testimony from former shut colleagues that he directed them to commit crimes.
After the prosecution rested its case after presenting 12 days of testimony, U.S. District Choose Lewis Kaplan denied a protection request to acquit Bankman-Fried earlier than the case goes to the jury. Protection lawyer Mark Cohen argued that prosecutors had not set forth “viable authorized theories” of wire fraud, which prosecutor Nicolas Roos disputed.
Bankman-Fried has pleaded not responsible to 2 counts of fraud and 5 counts of conspiracy. If convicted, Bankman-Fried may face many years in jail. Prosecutors have mentioned Bankman-Fried used the misappropriated funds to prop up his crypto-focused hedge fund, Alameda Analysis, make speculative enterprise investments, and donate greater than $100 million to U.S. political campaigns.
Kaplan mentioned a few of Bankman-Fried’s testimony would happen exterior the jury’s presence so he can resolve whether or not it’s admissible as proof.
That would come with any testimony in regards to the involvement of FTX attorneys in structuring loans from Alameda to FTX executives, which prosecutors have mentioned was a key method the defendant and others took funds from unwitting prospects.
Cohen mentioned in a Wednesday letter to Kaplan that Bankman-Fried’s “information that attorneys have been concerned in structuring and documenting the loans can be probative of his good-faith perception that there was nothing inappropriate.”
Prosecutors could ask Bankman-Fried on cross-examination about why he didn’t disclose Alameda’s privileges to FTX prospects or fairness buyers, and why he posted on social media within the midst of a wave of buyer withdrawals final November that FTX was “effective” when he knew it was quick billions of {dollars} in funds.
Authorized consultants have mentioned Bankman-Fried has little to lose by bucking standard knowledge and testifying, given weeks of testimony towards him by insiders portray an unflattering portrait of his character.
He has already taken an uncommon method for a prison defendant. As a substitute of laying low after he was charged, he revealed weblog posts on his view of what went unsuitable and met with a number of journalists.
Bankman-Fried has maintained that whereas he made errors operating FTX, he by no means meant to steal funds. His attorneys have mentioned three of his former colleagues, who’ve pleaded responsible and agreed to cooperate with prosecutors, tailor-made their testimony to implicate Bankman-Fried within the hopes of receiving lenient sentences.
The primary protection witness, Rolle, testified that the day after FTX declared chapter on Nov. 11, 2022, authorities within the Bahamas – the place FTX was based mostly – directed Bankman-Fried handy over remaining belongings to regulators within the Caribbean nation.
The protection may argue that Rolle’s account undercuts prosecution testimony from Gary Wang, FTX’s former chief know-how officer, that Bankman-Fried advised him he transferred belongings to the Bahamas as a result of “they appeared extra prone to let him keep in charge of the corporate, in comparison with the U.S.”
The ultimate prosecution witness, FBI agent Marc Troiano, testified about Bankman-Fried’s use of the encrpyted messaging software Sign when the trial resumed on Thursday morning in federal courtroom in Manhattan after a week-long break.
Troiano mentioned Sign teams that Bankman-Fried was in with colleagues typically have been set to delete messages routinely, as jurors noticed screenshots from a telephone belonging to Caroline Ellison, the previous chief government of Bankman-Fried’s Alameda Analysis hedge fund and his on-and-off girlfriend.
Ellison testified earlier within the trial that Bankman-Fried directed staff to “watch out with what we put in writing, and never put into writing one thing that might get us into authorized hassle.”
Cohen mentioned Bankman-Fried’s direct testimony may final shut to 5 hours.
Reporting by Luc Cohen and Jody Godoy in New York; Enhancing by Will Dunham, Noeleen Walder and Jonathan Oatis
Our Requirements: The Thomson Reuters Belief Ideas.
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