SBF testimony will detail FTX operations and the role of lawyers SBF testimony will detail FTX operations and the role of lawyers
Sam Bankman-Fried's lawyers said his actions were motivated by 'good faith.'
2 min read
Updated: Oct. 26, 2023 at 10:23 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Sam Bankman-Fried’s (SBF) legal team said his testimony would center on his understanding of industry practices and the transfer of FTX assets to Bahamian authorities following the company’s collapse last year.
SBF’s testimony will also shed light on his understanding of whether legal professionals played a role in various aspects of FTX’s operations and his knowledge of the exchange and Alameda’s financial health.
Furthermore, the defense will assert that SBF’s actions were carried out in “good faith” and were not motivated by any intent to deceive customers or investors.
SBF’s ‘good faith’ efforts
SBF’s testimony is expected to delve into specifics such as the exchange lawyers’ knowledge of company policies, bank accounts, and the FTX/Alameda relationship, among other details, including auto-deletion policies.
According to his legal team, the company’s in-house counsel was involved in making those decisions that the prosecution had interpreted as proof of SBF’s criminal intent.
Thus, SBF’s testimony will allegedly clarify “his understanding as to what the attorneys were present for, what their tasks were, what information they were provided, and the impact of his knowledge of their involvement on his belief that his conduct was at all times proper and lawful.”
SBF’s attempt to use the “knowledge of counsel” defense during his opening remarks had been denied by Judge Lewis Kaplan because it risked prejudicing the jury.
Furthermore, the defense plans to query Bankman-Fried’s understanding of specific industry practices, mainly omnibus wallets, which would show his good faith and lack of criminal intent.
Lastly, the defense aims to demonstrate how SBF’s authorization to transfer FTX’s assets to the Bahamian authorities was another action made in good faith. This would be done by rebutting testimony provided by FTX’s former Chief Technology Officer Gary Wang, who alleged that SBF acted in a bid to retain control of the collapsed company.
The defense counsel argued that the Bankman-Fried’s decision was based on the belief that Bahamian authorities prioritized customers’ best interests, and it was done to resolve conflicts of interest involving in-house counsel and external bankruptcy counsel.
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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Alameda Research
Alameda Research was once a principal trading firm, operating as an arm of the failed crypto exchange, FTX.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.