Testimony from Sam Bankman-Fried’s trusted inner circle will be used to convict him, prosecutors say

NEW YORK — Testimony from FTX founder Sam Bankman-Fried’s “trusted inside circle” of former executives at his collapsed cryptocurrency empire might be used to show at an October trial that he misappropriated billions of {dollars} from his buyers to gasoline his companies, make unlawful marketing campaign contributions and enrich himself, prosecutors stated Monday.

Prosecutors made the assertions in papers filed in Manhattan federal courtroom, the place Bankman-Fried is charged with defrauding buyers in his companies and illegally diverted thousands and thousands of {dollars}’ price of cryptocurrency from prospects utilizing his FTX trade. He has pleaded not responsible.

The courtroom submitting, during which prosecutors describe proof they plan to current to jurors, got here three days after Bankman-Fried was despatched to a federal jail in Brooklyn to await trial by Decide Lewis A. Kaplan, who stated there was possible trigger to consider he had tried to tamper with witness testimony at the very least twice since his December arrest.

It additionally got here on the identical day that prosecutors filed a streamlined indictment that comprises the seven fees Bankman-Fried faces on the Oct. 2 trial — however there isn’t any longer a marketing campaign finance cost for now, although it may go to trial later if they’re discovered to evolve with the phrases of an extradition treaty with the Bahamas.

Nonetheless, prosecutors stated within the newest indictment that Bankman-Fried misappropriated buyer cash to assist fund over $100 million in political contributions prematurely of the 2022 election. The indictment stated he sought to “maximize FTX’s political affect” and use “these connections with politicians and authorities officers to falsely burnish the general public picture of FTX as a professional trade.”

Late Monday, Bankman-Fried’s legal professionals filed their very own courtroom papers associated to trial proof. In them, they requested that the trial decide exclude proof in regards to the FTX chapter, the solvency of FTC and its affiliated buying and selling platform, Alameda Analysis, and their capability to pay prospects again.

In addition they requested that the decide ban prosecutors from telling jurors that Bankman-Fried resigned from FTX. They stated they could oppose the prosecution’s plans to introduce proof associated to severed or withdrawn counts, such because the marketing campaign finance cost.

Earlier than Friday, Bankman Fried, 31, had been dwelling along with his mother and father in Palo Alto, California, after signing a $250 million private recognizance bond following his extradition from the Bahamas final December.

Prosecutors not too long ago sought his detention, saying he had tried to intimidate his former girlfriend, Caroline Ellison — the onetime CEO of Alameda Analysis — by releasing a few of her writing to a journalist.

On Monday, the federal government stated they might depend on testimony from Ellison, FTX co-founder Gary Wang and former FTX engineering chief Nishad Singh to indicate jurors “the illegal conduct directed and undertaken by the defendant.”

All three have pleaded responsible to prison fees in cooperation agreements with the federal government that might earn them leniency at sentencing.

Prosecutors stated they “shaped the defendant’s trusted inside circle in the course of the course of the conspiracy” and their testimony might be supplemented by a number of former workers of Alameda and FTX together with a number of victims, together with prospects, lenders and buyers.

Different proof will consist of monetary information, Google paperwork and spreadsheets, and personal communications, they added.

A spokesperson for Bankman-Fried declined touch upon Monday.

In the meantime, the decide on Monday granted a request by protection legal professionals that their shopper be provided his every day prescribed drugs for melancholy and a focus deficit/hyperactivity dysfunction.