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.”
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 Bankman-Fried’s criminal trial, for which he has pleaded not guilty to all charges. This week, former Alameda Research CEO and SBF’s ex-girlfriend Caroline Ellison testified, admitting to committing fraud at the direction of Bankman-Fried by providing fraudulent documents and making misleading statements concerning Alameda using FTX funds.
BlockFi founder CEO Zac Prince took the stand late on Oct. 12 and into Oct. 13, testifying on a $400-million credit line the firm provided to FTX US in July 2022 and the ripples caused by the collapse of Terraform Labs and Three Arrows Capital. The trial has been adjourned until Oct. 16.
Magazine: Can you trust crypto exchanges after the collapse of FTX?
Politics
Starmer says decision to increase defence spending was ‘accelerated’ by Trump taking office
Sir Keir Starmer has admitted his decision to increase defence spending was “accelerated” by Donald Trump taking office.
The prime minister said today’s announcement was “three years in the making” after Russia invaded Ukraine – but a “very changed context” pushed him forward.
Politics Live: PM warns ‘everything has changed’ after announcing defence spending boost
In a surprise Commons statement on Tuesday morning, Sir Keir said defence spending will increase to 2.5% of GDP by 2027, funded by a cut in the foreign aid budget.
While this honours a Labour manifesto commitment, ministers have previously been tight-lipped about when the new target would be reached – with today’s decision coming ahead of a meeting between Sir Keir and Mr Trump in Washington on Thursday.
Asked by Sky News political editor Beth Rigby if Mr Trump had “bounced” him into setting out a timeline, given he has long called for European countries to boost defence spending, the prime minister said: “I think in our heart of hearts, we’ve all known that this decision has been coming for three years, since the beginning of the conflict in Ukraine.
“The last few weeks have accelerated my thinking on when we needed to make this announcement.”
Analysis: Starmer has put Britain on a war footing ahead of key Trump meeting
However, he denied Mr Trump was effectively setting UK government policy, saying the defence spending increase is “very much my decision” and he has been “arguing for some time” that Europe and the UK “needed to do more”.
He said talks of “possible peace” and what that would mean for Europe’s security – with the potential for UK peacekeeping troops to be put on the ground – “has brought our response into sharp focus”.
“I have pushed our system to move this date forward because I think it’s vital that we take the decision now, that we rise to the occasion and we show the leadership that’s needed across Europe, in response to a very changed context,” he said.
Sir Keir Starmer
The UK currently spends 2.3% of GDP on defence, with the jump to 2.5% meaning £13.4bn more will be spent annually on defence from 2027.
Sir Keir said he wants that figure to reach 3% of gross domestic product during the next parliament, but that would depend on Labour winning the next election.
Farage ‘fawning over Putin’
Asked if he is “Nigel Farage is disguise”, given the Reform UK leader has previously vowed to increase defence spending but cut the foreign aid budget, Sir Keir said: “Nigel Farage didn’t even turn up to the debate in parliament today. Nigel Farage is fawning over Putin. That’s not patriotism.
“What I’ve done is take the duty of the prime minister seriously, which is to ensure that our citizens are safe and secure.”
Nigel Farage addresses the Conservative Political Action Conference in Maryland Pic: Reuters
Mr Farage has previously faced criticism for saying the West provoked Russia’s invasion of Ukraine with NATO and the EU’s expansions, and for saying he admired Vladimir Putin as a statesman.
Sir Keir’s announcement comes as Europe reels from a shift in US foreign policy, with the White House making clear it is no longer prepared to bankroll the defence of other NATO members.
Last week also saw an exchange of words between Mr Trump and Ukrainian President Volodymyr Zelenskyy, after officials from Washington and Moscow held peace talks without anyone from Kyiv or Europe present.
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Ukraine war three years on
‘Desertion of leadership’
Sir Keir announced the government would cut back on foreign aid to fund the increase, reducing current spending from 0.5% of GDP to 0.3% – in a move that has angered some charities.
Conservative leader Kemi Badenoch welcomed the measure and said she had written to the prime minister over the weekend to suggest how he could redirect money from the overseas development budget.
But former Tory defence secretary Ben Wallace said an extra 0.2% was “a staggering desertion of leadership”.
“Tone deaf to dangers of the world and demands of the United States,” he wrote on X.
“Such a weak commitment to our security and nation puts us all at risk.”
The platform called the move a “huge win for DeFi” after reports have suggested the SEC may be radically changing its approach to crypto enforcement in 2025.
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