Former FTX CEO’s Legal Team Seeks to Use Crypto Exchange’s Terms of Service in Trial
The lawyers representing former FTX CEO Sam “SBF” Bankman-Fried are requesting permission to bring up specific information from the crypto exchange’s terms of service during witness testimonies. This motion aims to address evidentiary issues in the ongoing criminal trial taking place in the United States District Court for the Southern District of New York.
The central issue revolves around conflicting theories presented by prosecutors and the defense team regarding the alleged misuse of FTX funds. Bankman-Fried’s lawyers argue that compliance with FTX’s terms of service is a defense to the charged offense, regardless of users’ understanding of those terms.
The defense seeks to question witnesses based on FTX’s terms of service and exclude testimony from “lay fact witnesses.” They specifically mention Paradigm co-founder Matt Huang, claiming that his testimony offered an “expert opinion” rather than reflecting everyday experience with FTX’s services.
Challenges to Prosecution’s Strategy
The defense argues that by relying on customers’ beliefs and expectations to prove misappropriation, the prosecution is trying to avoid its burden of proving an essential element of its embezzlement theory beyond a reasonable doubt. They believe that evidence of customers’ beliefs about their legal relationship with FTX would only serve to distract and confuse jurors when considering the facts in light of the terms of service.
Updates on Bankman-Fried’s Trial
As of October 13, Bankman-Fried has pleaded not guilty to all charges in his criminal trial, which has now reached its eighth day. Caroline Ellison, former Alameda Research CEO and Bankman-Fried’s ex-girlfriend, testified this week, admitting to committing fraud at his direction using FTX funds. Zac Prince, CEO of BlockFi, also took the stand to discuss a $400 million credit line provided to FTX US and the impact of the collapse of Terraform Labs and Three Arrows Capital. The trial has been adjourned until October 16.
Hot Take: Defense Highlights Importance of FTX’s Terms of Service
The defense team representing former FTX CEO Sam “SBF” Bankman-Fried is seeking to leverage FTX’s terms of service as a key aspect of their strategy in his ongoing criminal trial. They argue that compliance with these terms should serve as a defense to the charges against Bankman-Fried, regardless of customers’ understanding or expectations. By challenging the prosecution’s reliance on customers’ beliefs and expectations, the defense aims to demonstrate that the terms of service are crucial in determining the legal relationship between FTX and its users. As the trial continues, it remains to be seen how this argument will impact the outcome.
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