Court Denies SBF’s Crypto Regulation Defense in FTX Case

In the latest developments surrounding the former FTX CEO, Sam Bankman-Fried, New York District Judge Lewis A. Kaplan has made critical rulings on what can be presented during the trial. Moreover, these decisions could significantly shape the direction and outcomes of the proceedings.

Bankman-Fried’s Defense Faces Key Rejections

One of the main contentions was regarding the FTX bankruptcy proceedings. Bankman-Fried’s legal team had hoped to introduce evidence about the recovery of assets in this context. However, Judge Kaplan firmly ruled against this, stating that intentions regarding repayment or the ability to repay misappropriated funds were legally immaterial. According to the Judge, the offense was complete when there was an immediate intention to misapply and defraud.

Additionally, the courtroom saw another setback for Bankman-Fried’s defense. His team aimed to spotlight the lack of crypto regulation in the U.S. as part of their argument. But Kaplan dismissed this angle, noting it would hold “minimal probative value” and might even risk confusing the jury. Hence, the landscape of the trial looks more challenging for the former FTX CEO.

Ellison Testifies on Alameda’s Financial Decisions

However, not all was bleak for Bankman-Fried. Judge Kaplan agreed to reconsider whether he could present his charitable contributions as evidence. But this comes with strings attached. The philanthropic efforts can only be presented for the right reasons and not to indicate a lack of propensity to commit crime. Any disagreements on specific questions related to this would be settled in court.

As the trial progresses, significant figures have come forward. One of the witnesses, Caroline Ellison, former CEO of Alameda Research, took the stand. Testimony from Ellison revealed that she often deferred to Bankman-Fried on pivotal decisions. These ranged from repaying Alameda’s lenders to deciding what financial details to disclose to banks and investors.

Read Also: Caroline Ellison Admits Alameda Research Maintains 7 Alternative Balance Sheets