SBF can’t blame FTX counsel in opening remarks, judge rules

• The criminal trial against FTX’s ex-CEO, Sam Bankman-Fried, will begin on 3 October.
• Prosecutors are planning to present testimony from customers, investors, and co-conspirators at FTX.

Sam Bankman-Fried “SBF” cannot blame his company FTX’s [FTT] counsel in the opening remarks, the presiding judge ruled.

The criminal trial against SBF begins in a Manhattan federal court on 3 October.

On 1 October, Judge Lewis Kaplan ruled that SBF and his legal team cannot use the “advice of counsel” argument to defend his decisions as the CEO — at least, not in the beginning.

The judge ruled that permitting this argument would risk prejudicing the jury from the beginning itself. However, SBF can make the said argument at a later stage of the trial.

In August, SBF’s lawyers opined they intended to tell the court that SBF believed he acted “in good faith” as his actions were based on legal advice given by FTX’s counsel – Fenwick & West.

Soon after, federal prosecutors moved to court

to prevent the defense from using the “advice of counsel” argument. They said that the defense must first prove a clear connection between the alleged wrongdoing and the counsel’s advice.

Customers, investors, co-conspirators… a long line of witnesses

In another development, prosecutors informed the court that they planned to present testimony from customers and investors adversely affected by FTX’s collapse.

The witnesses would detail how the usage of their assets held at FTX was way different from their expectations of how these assets would be used.

Among the witnesses also include the alleged co-conspirators at FTX, who have entered into “guilty pleas.”

Not mentioned in the filing, these witnesses include FTX co-founder Gary Wang, former head of engineering Nishad Singh, and former CEO of Alameda Research Caroline Ellison. Ellison is also SBF’s ex.

Prosecutors also told the court that they would use testimony from non-U.S. citizens too. FTX’s clientele was spread across the world, with U.S. customers only able to access it through a smaller division, FTX U.S.

One such witness is a Ukrainian citizen who will testify virtually, as Ukrainian males over the age of 18 cannot leave the country due to the ongoing war with Russia.

SBF is facing charges of money laundering, wire fraud, and illegal political donations. If convicted, he could face decades behind bars for his role in the collapse of FTX.