October 26, 2023 at 12:17 GMTModified date: October 26, 2023 at 12:17 GMT
October 26, 2023 at 12:17 GMT

Defence attorneys request to cover SBF’s reliance on legal counsel at FTX

A Wednesday filing revealed the intention of Sam Bankman-Fried’s attorneys to quiz him on the involvement of legal counsel in certain operations at the now-defunct exchange FTX.

A Wednesday filing revealed the intention of Sam Bankman-Fried’s attorneys to quiz him on the involvement of legal counsel in certain operations at the now-defunct cryptocurrency exchange FTX.

The permission was requested in a pre-emptive communication letter submitted to Judge Lewis A. Kaplan regarding the testimony of Bankman-Fried, should he decide to testify. It outlined the specific areas of testimony that the defence side wanted to cover.

A key one here was how the attorneys sought to elicit Bankman-Fried’s testimony on his reliance on legal counsel during key events. This will be to assert that his actions were in good faith based on legal advice. Specific instances include the implementation of data retention policies, the creation of certain entities, and the drafting of agreements and loan documents.

The defence wants SBF to elaborate on his knowledge of certain industry practices and his intentions on 12 November 2022 to “rebut the inferences from Gary Wang’s testimony that Mr. Bankman-Fried directed the transfer of assets to Bahamian regulators on that date, over the objections of FTX’s in-house and outside legal counsel, in an effort to retain control of FTX”.

The attorneys would then try to show that his actions were based on a genuine belief that the Bahamian authorities were acting in the best interests of FTX customers. They plan to argue that SBF’s awareness of the counsel’s involvement substantiates his belief in the legality of his actions.

This would counter the implications of fraudulent intent that has been the subject of almost all of the other testimonies brought through by the prosecution till date.

The defence team also responded to the prosecutions’ argument saying that the use of auto-deletion policies served as an evidence of Bankman-Fried’s fraudulent and criminal intent. Countering the same, SBF’s lawyers said that his understanding of auto-deletion policies being “instituted under the guidance of lawyers” would be directly relevant to rebutting the inference.

The other key area that the defence sought to touch upon is Bankman-Fried’s involvement of counsel in the formation of the North Dimension entities and opening of its account at Silvergate Bank to be “directly relevant to his good faith belief that there was nothing improper about using Alameda-controlled entities to accept FTX customer deposits”.

In doing so, they also intend to question the former CEO on his knowledge that lawyers were involved in structuring and documenting the loans made from Alameda to FTX executives. Bankman-Fried’s testimony would therefore aim to counter allegations by demonstrating that his actions were consistent with industry norms and that his knowledge of industry practices were standard and lawful.

The letter emphasised that these points were crucial for Mr. Bankman-Fried’s defence and requested them to give him a chance to personally address allegations and inferences drawn during the trial. The defence team requested the court to allow Mr. Bankman-Fried to testify on these matters, highlighting the importance of his perspective in establishing the truth.

Bankman-Fried’s lawyers also wanted FBI special agents Luke Booth and Kristin Allain to testify in court before the former CEO himself took the stand himself on Thursday. This was because they believed that the former FTX co-founder, Gary Wang, and head of engineering, Nishad Singh, testified inconsistently with what they earlier told the FBI.

However, Judge Kaplan denied the request for the same on Wednesday.