NEW YORK — Testimony from FTX founder Sam Bankman-Fried’s “trusted inside circle” of former executives at his collapsed cryptocurrency empire will likely be used to show at an October trial that he misappropriated billions of {dollars} from his traders 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 court docket, the place Bankman-Fried is charged with defrauding traders in his companies and illegally diverted tens of millions of {dollars}’ price of cryptocurrency from clients utilizing his FTX change. He has pleaded not responsible.
The court docket submitting, by 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 Choose Lewis A. Kaplan, who stated there was possible trigger to imagine he had tried to tamper with witness testimony no less than twice since his December arrest.
It additionally got here on the identical day that prosecutors filed a streamlined indictment that incorporates the seven costs Bankman-Fried faces on the Oct. 2 trial — however there is not any longer a marketing campaign finance cost for now, although it might 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 upfront 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 reliable change.”
Late Monday, Bankman-Fried’s legal professionals filed their very own court docket papers associated to trial proof. In them, they requested that the trial choose exclude proof in regards to the FTX chapter, the solvency of FTC and its affiliated buying and selling platform, Alameda Analysis, and their means to pay clients again.
Additionally they requested that the choose 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 They stated they could oppose the prosecution’s plans to introduce proof associated to severed or withdrawn counts, such because the marketing campaign finance cost.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 just lately 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 point out jurors “the illegal conduct directed and undertaken by the defendant.”
All three have pleaded responsible to prison costs in cooperation agreements with the federal government that might earn them leniency at sentencing.
Prosecutors stated they “shaped the defendant’s trusted inside circle throughout the course of the conspiracy” and their testimony will likely be supplemented by a number of former staff of Alameda and FTX together with a number of victims, together with clients, lenders and traders.
Different proof will consist of monetary data, Google paperwork and spreadsheets, and personal communications, they added.
A spokesperson for Bankman-Fried declined touch upon Monday.
In the meantime, the choose on Monday granted a request by protection legal professionals that their consumer be equipped his every day prescribed drugs for melancholy and a spotlight deficit/hyperactivity dysfunction.
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