Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange, has encountered a setback in his criminal fraud trial, as a US judge has placed limitations on his ability to introduce expert witnesses. In a bid to sway the jury and defend himself against charges of embezzling billions of dollars from FTX customer funds to offset losses at his Alameda Research hedge fund, Bankman-Fried had planned to enlist the testimony of seven experts. These experts were expected to provide insights into cryptocurrency markets and English contracts, but Sam Bankman Fried expert witness was denied.
However, US District Judge Lewis Kaplan issued a written order that excluded three of these proposed expert witnesses. The judge justified his decision by deeming their testimony either irrelevant to the case or potentially confusing for the jury. Adding to the complexity of the situation, in late August, attorneys representing the US Department of Justice filed a motion seeking the exclusion of every witness suggested by Bankman-Fried.
Judge Rules Against Sam Bankman-Fried’s Expert Witnesses Testifying
Among these witnesses was Peter Vinella, a consultant who intended to discuss “FTX’s utilization of widely accepted financial services industry practices.” Judge Kaplan deemed this testimony irrelevant to the case. Additionally, Bankman-Fried was prevented from summoning English barrister Lawrence Akka to provide testimony regarding FTX’s terms of service, which fell under the jurisdiction of English law. Kaplan’s reasoning was that only a judge could provide guidance to the jurors on legal matters.
According to the court’s perspective, Akka’s testimony does not fulfil the purpose of assisting the jury in understanding FTX’s terms of service. Instead, it is regarded as an expression of “legal opinions” pertaining to the interpretation of the contractual terms in question. The defence team also sought to introduce testimony concerning FTX’s financials, software, and document metadata, which would have been provided by consultants Thomas Bishop and Joseph Pimbley, as well as data analytics specialist Brian Kim.
However, citing Rule 16, which mandates the government to disclose the specific evidence it plans to utilize during the trial, the court dismissed all potential testimonies from these witnesses.
The government has the authority to potentially deny all requests
Sam Bankman-Fried’s legal team has the option to submit a request to allow specific witnesses to provide testimony if they believe these witnesses can effectively counter the testimony presented by government witnesses. However, the government may choose to contest this request.
According to information in the court documents, Bankman-Fried might assert that the terms of service did not expressly forbid the utilization of customer funds for investments, drawing a parallel with the conventional banking practice of using deposits to fund loans. He could argue that this method was commonplace within the cryptocurrency industry.
In US criminal trials, it is customary for both prosecutors and defendants to enlist expert witnesses to help clarify intricate issues. In this particular case, the prosecution intends to call upon three former FTX and Alameda executives, all of whom have admitted their involvement in the alleged fraud, as witnesses in Sam Bankman-Fried’s trial.
The trial is anticipated to span a duration of up to six weeks as it progresses. Bankman-Fried, a 31-year-old former billionaire, has pleaded not guilty to the charges levelled against him. While he has acknowledged shortcomings in risk management at FTX before its collapse in November 2022, he vehemently refutes any wrongdoing in relation to the misappropriation of funds.
In a pivotal legal development, Sam Bankman-Fried’s criminal trial has seen a surprising event where Sam Bankman Fried expert witness was denied, challenging the conventional practice in US trials. The exclusion raises the stakes for both the prosecution and defence as they navigate the complexities of cryptocurrency-related charges. As the trial unfolds, the absence of expert testimonies could streamline proceedings but also place a greater burden on presenting clear and concise evidence to the jury. The case’s outcome will not only determine Bankman-Fried’s fate but may also have far-reaching implications for the cryptocurrency industry and its regulatory future. All eyes remain fixed on this high-stakes trial.