- Judge Kaplan weighs jury instructions in Sam Bankman-Fried’s trial, with defense and prosecution differing on how to guide jurors.
- Former FTX counsel reveals Bankman-Fried’s request for “legal justifications” amid missing funds, potentially complicating his defense.
In the high-profile federal criminal case against Sam Bankman-Fried, Judge Lewis Kaplan is poised to make a critical decision. This development comes as the U.S. Department of Justice (DOJ) and Bankman-Fried’s defense team have submitted their proposed jury instructions. The outcome of this decision will play a pivotal role in shaping the path this trial takes as it enters its final stages.
The proposed jury instructions, filed by both the prosecution and the defense, are now on the judge’s desk for consideration. Each side has offered its distinctive viewpoint on instructing the jury concerning the seven charges Bankman-Fried faces.
Key Points of Contention
While there are commonalities in the proposed instructions, such as addressing the indictment and explaining the charges, there are also crucial points of contention between the two sides.
Defense Perspective:
The defense is resolute that a witness’s personal feelings or beliefs regarding what the law should prohibit should not suffice for a conviction. Instead, they emphasize a meticulous assessment of each charge’s elements, urging the jury to determine if there is proof beyond a reasonable doubt for each element before rendering a unanimous verdict.
Prosecution Perspective:
Conversely, the prosecution is keen on dispelling any notion that Bankman-Fried’s actions, particularly those connected to FTX and Alameda, were linked to charitable endeavors. They are seeking clarity from the judge in instructing the jury that the DOJ alleges Bankman-Fried misappropriated customer and investor funds for personal use, a stark contrast to the generous narrative he had purported.
Balancing Act for the Judge
Judge Kaplan is tasked with weighing these opposing views and crafting jury instructions to guide the jurors’ deliberations. This decision could significantly influence the trial’s outcome, as it will set the framework for how the jury evaluates the evidence and applies the law.
Crucial Testimony
As this legal drama unfolds, the trial has witnessed pivotal testimonies, including that of Can Sun, FTX’s former general counsel. Sun’s revelations shed light on a crucial moment when Bankman-Fried asked him to conjure “legal justifications” for the apparent absence of $7 billion in customer funds, just days before FTX declared bankruptcy.
Sun’s Testimony
Can Sun’s testimony add a layer of complexity to Bankman-Fried’s defense? Sun disclosed that FTX, in dire need of capital to cover a wave of customer withdrawals, approached investment fund Apollo for emergency funding. Apollo’s request for financial statements revealed a shocking truth: FTX was short of meeting customer withdrawals and owed billions to Bankman-Fried’s Alameda Research.
Sun, testifying under a non-prosecution agreement, felt shaken by this revelation. Sun’s account of Bankman-Fried’s request for “legal justifications” highlighted suspicions of misappropriating customer funds for other purposes.
Prosecutors assert that Bankman-Fried actively funneled FTX customer funds into Alameda Research, which subsequently extended a $2.2 billion loan to Bankman-Fried and other executives. Prosecutors allege that these loans financed various ventures, including investments, real estate acquisitions, and political campaign donations.
In contrast, Bankman-Fried’s defense insists that he genuinely believed Alameda’s use of FTX customer funds was appropriate. They attribute his business decisions to his “effective altruism” philosophy and emphasize that such arguments should not constitute defenses against fraud or other criminal charges.
Internal Confusion and Tensions
Sun’s testimony reveals a culture of internal confusion and tensions within FTX. When questioned about the missing funds, Sun encountered evasive responses from Bankman-Fried and former FTX engineering chief Nishad Singh, who had previously pleaded guilty to fraud and testified against Bankman-Fried.
As the trial takes a temporary hiatus, with proceedings scheduled to resume on October 26, it is crucial to emphasize the significance of these developments. The jury instructions that Judge Kaplan ultimately chooses will play a pivotal role as jurors deliberate on the fate of Sam Bankman-Fried, who potentially faces a lengthy prison sentence if convicted.
