Sam Bankman-Fried’s testimony to challenge government claims, lawyer tells judge
Former FTX CEO Sam Bankman-Fried’s upcoming testimony has been outlined in a letter to Judge Lewis Kaplan by his lawyer, Mark Cohen.
In the letter submitted by Cohen to inform the court of the planned testimony during Bankman-Fried’s direct examination, the defense requested approval to obtain testimony regarding Bankman-Fried’s awareness of counsel’s participation in specific matters, following the court’s order from Oct. 1, 2023.
FTX, FTX US and Alameda Research entered bankruptcy proceedings on Nov. 11, 2022, with Bankman-Fried resigning as CEO. He was arrested in the Bahamas on Dec. 12 after the United States government formally notified the country of charges against him. Meanwhile, FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison agreed to plead guilty to the charges made against them and are cooperating with the government.
Bankman-Fried’s testimony would challenge government allegations, particularly concerning counsel involvement in events such as auto-deletion policies, creating north dimension entities, the payment agent agreement, loans from Alameda and drafting FTX terms of service.
The defense argues that Bankman-Fried’s understanding of legal counsel’s involvement is relevant to his state of mind and good faith. Furthermore, they assert that his knowledge of industry practices is essential to demonstrate his belief in acting in line with accepted norms.
According to the letter, Ellison’s acknowledgment of providing manipulated data, former FTX chief technology officer Gary Wang’s claims of Bankman-Fried’s involvement in enabling Alameda to “withdraw unlimited funds,” and former FTX engineering director Nishad Singh’s testimony about Alameda’s “excessive” celebrity endorsements purchases, underscore the significance of Bankman-Fried’s testimony regarding his intentions on Nov. 12, 2022, to counter inferences drawn from prior witness statements.
Related: Sam Bankman-Fried has no way to ‘outfox’ prosecutors: Scaramucci
Furthermore, the letter notes that the defense plans to have Mr. Bankman-Fried testify about his sincere intentions regarding his compliance with directives from Bahamian authorities. This testimony would revolve around his belief that Bahamian authorities prioritized FTX customers’ well-being and that FTX’s in-house and U.S. bankruptcy counsel had potential conflicts of interest.
The United States government is expected to wrap up its case against Bankman-Fried on the morning of Oct. 26, with defense attorneys likely finishing the following day. Prosecutors added they were uncertain whether rebuttal witnesses would be necessary depending on Bankman-Fried’s testimony. Closing arguments could be held before Oct. 31.
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According to the US Department of Justice, Wolf Capital’s co-founder has pleaded guilty to wire fraud conspiracy for luring 2,800 crypto investors into a Ponzi scheme.
Making Britain better off will be “at the forefront of the chancellor’s mind” during her visit to China, the Treasury has said amid controversy over the trip.
Rachel Reeves flew out on Friday after ignoring calls from opposition parties to cancel the long-planned venture because of market turmoil at home.
The past week has seen a drop in the pound and an increase in government borrowing costs, which has fuelled speculation of more spending cuts or tax rises.
The Tories have accused the chancellor of having “fled to China” rather than explain how she will fix the UK’s flatlining economy, while the Liberal Democrats say she should stay in Britain and announce a “plan B” to address market volatility.
However, Ms Reeves has rejected calls to cancel the visit, writing in The Times on Friday night that choosing not to engage with China is “no choice at all”.
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The chancellor will be accompanied by Bank of England governor Andrew Bailey and other senior executives.
She will meet with her counterpart, Vice Premier He Lifeng, in Beijing on Saturday to discuss financial services, trade and investment.
She will also “raise difficult issues”, including Chinese firms supporting Russia’s invasion of Ukraine and concerns over constraints on rights and freedoms in Hong Kong, the Treasury said.
But it did not mention whether Ms Reeves would raise the treatment of the Uyghur community, which Downing Street said Foreign Secretary David Lammy would do during his visit last year.
Britain’s Foreign Secretary David Lammy and Chinese Foreign Minister Wang Yi in Beijing. Pic: AP
On Friday, Culture Secretary Lisa Nandy defended the trip, telling Sky News that the climbing cost of government borrowing was a “global trend” that had affected many countries, “most notably the United States”.
“We are still on track to be the fastest growing economy, according to the OECD [Organisation for Economic Co-operation and Development] in Europe,” she told Anna Jones on Sky News Breakfast.
“China is the second-largest economy, and what China does has the biggest impact on people from Stockton to Sunderland, right across the UK, and it’s absolutely essential that we have a relationship with them.”
Read more – Ed Conway analysis: The chancellor’s gamble with China
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Nandy defends Reeves’ trip to China
However, former prime minister Boris Johnson said Ms Reeves had “been rumbled” and said she should “make her way to HR and collect her P45 – or stay in China”.
While in the country’s capital, Ms Reeves will also visit British bike brand Brompton’s flagship store, which relies heavily on exports to China, before heading to Shanghai for talks with representatives across British and Chinese businesses.
It is the first UK-China Economic and Financial Dialogue (EFD) since 2019, building on the Labour government’s plan for a “pragmatic” policy with the world’s second-largest economy.
Sir Keir Starmer was the first British prime minister to meet with China’s President Xi Jinping in six years at the G20 summit in Brazil last autumn.
Relations between the UK and China have become strained over the last decade as the Conservative government spoke out against human rights abuses and concerns grew over national security risks.
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How much do we trade with China?
Navigating this has proved tricky given China is the UK’s fourth largest single trading partner, with a trade relationship worth almost £113bn and exports to China supporting over 455,000 jobs in the UK in 2020, according to the government.
During the Tories’ 14 years in office, the approach varied dramatically from the “golden era” under David Cameron to hawkish aggression under Liz Truss, while Rishi Sunak vowed to be “robust” but resisted pressure from his own party to brand China a threat.
The Treasury said a stable relationship with China would support economic growth and that “making working people across Britain secure and better off is at the forefront of the chancellor’s mind”.
Ahead of her visit, Ms Reeves said: “By finding common ground on trade and investment, while being candid about our differences and upholding national security as the first duty of this government, we can build a long-term economic relationship with China that works in the national interest.”
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