Saturday, 2 December 2023

Crypto News

Sam Bankman-Fried’s legal team moves to pursue theory on FTX terms of service

Sam Bankman-Fried's legal team moves to pursue theory on FTX terms of service

Lawyers 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 United States District Court for the Southern District of New York, SBF’s legal team said the motion was aimed at addressing “address 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”.

“[I]t 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,” said the filing, 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 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,” said 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…

Click Here to Read the Full Original Article at News…