Home Cryptocurrency Bankman-Fried’s expert witnesses rejected by judge

Bankman-Fried’s expert witnesses rejected by judge

by Harry Garcia

U.S. Judge Restricts Expert Witnesses in Sam Bankman-Fried’s Criminal Trial

In a significant blow to Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, a U.S. judge has restricted his ability to call expert witnesses to testify in his criminal fraud trial. Bankman-Fried had hoped to call upon seven experts to convince jurors of his innocence in relation to allegations of stealing billions of dollars in FTX customer funds. However, U.S. District Judge Lewis Kaplan ruled that three of the proposed witnesses would not be allowed to take the stand, deeming their testimony either irrelevant or potentially confusing to the jury.

Bankman-Fried still has the option to seek the testimony of the remaining four experts, but only for the purpose of rebutting prosecution witnesses. One of the rejected witnesses was Peter Vinella, a consultant who planned to testify about “FTX’s use of widely-accepted practices in the financial services industry.” Judge Kaplan ruled that Vinella’s testimony would not be relevant to the case. Additionally, Bankman-Fried was denied the ability to call English barrister Lawrence Akka to testify about FTX’s terms of service, as the judge determined that only a judge could instruct the jury about the law.

Bankman-Fried’s defense strategy may involve arguing that the terms of service did not prohibit the use of customer funds for investments, citing common practices in the cryptocurrency industry. They may assert that this is similar to how banks use deposits to fund loans. Bankman-Fried, who was once a billionaire, has pleaded not guilty to the charges. While he has admitted to poor risk management at FTX prior to its collapse in November 2022, he vehemently denies stealing funds from customers.

The use of expert witnesses is customary in U.S. criminal trials, as they help jurors navigate complex subject matters. On the prosecution side, three former executives from FTX and Alameda, who have already pleaded guilty, are expected to testify against Bankman-Fried. The trial, which could last up to six weeks, will shed light on the allegations and the future of a prominent figure in the cryptocurrency industry.

In the fast-evolving world of cryptocurrencies, this trial has garnered attention both within and outside the industry. Many stakeholders are closely following the proceedings, as they could have implications for investor protection and regulatory frameworks. The outcome of this trial will be closely watched, as it may set precedents for future cases tied to cryptocurrency fraud and the responsibilities of exchange founders.

As the trial gets underway, it remains to be seen how Bankman-Fried’s defense strategy evolves in light of the restrictions imposed on expert witnesses. The defense team will have to rely on other evidence and arguments to mount their defense against the allegations. Meanwhile, prosecutors will present their case supported by the testimony of former executives. The trial will undoubtedly be a crucial moment in the ongoing saga of cryptocurrencies and the law, as it grapples with the complex challenges brought about by this rapidly evolving industry.

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