Prosecutors within the legal case towards Sam Bankman-Fried, the founding father of the collapsed cryptocurrency change FTX, on Monday offered essentially the most detailed account thus far of the proof they plan to make use of to convict him at trial in October.
In a 70-page courtroom submitting, the prosecutors mentioned they might draw on testimony from a few of Mr. Bankman-Fried’s closest advisers, in addition to an professional witness and different workers of FTX and Alameda Analysis, a crypto hedge fund he additionally based.
The prosecutors additionally mentioned they deliberate to make use of notes that Caroline Ellison, certainly one of Mr. Bankman-Fried’s prime lieutenants, took after conversations with him, together with a memo titled “Issues Sam Is Freaking Out About.” They usually mentioned they might introduce a recording of a gathering during which Ms. Ellison informed Alameda workers that she had labored with Mr. Bankman-Fried to siphon funds from FTX clients’ accounts.
Mr. Bankman-Fried, a onetime crypto mogul who constructed FTX into one of many world’s largest digital foreign money exchanges, was arrested in December and charged with orchestrating a sweeping scheme to make use of buyer deposits to finance actual property purchases, charitable giving and donations to politicians. Ms. Ellison and two different prime FTX executives, Gary Wang and Nishad Singh, have pleaded responsible to taking part within the effort and agreed to cooperate with prosecutors.
Mr. Bankman-Fried faces seven expenses of wire fraud, securities fraud, commodities fraud and cash laundering. He has pleaded not responsible and is scheduled to go on trial on Oct. 2. Final week, he was despatched to jail after the decide overseeing the case revoked his bail over allegations that he was making an attempt to intimidate witnesses.
A spokesman for Mr. Bankman-Fried declined to remark. A lawyer for Ms. Ellison didn’t reply to a request for remark.
The prosecutors’ submitting on Monday argued that the proof they gathered must be legally admissible at Mr. Bankman-Fried’s trial. The proof contains monetary information, spreadsheets, Google paperwork and personal communications, in line with the submitting.
Mr. Bankman-Fried’s legal professionals submitted their very own memo on Monday, claiming that prosecutors had “repeatedly failed” to satisfy the deadlines for turning over proof to the protection. Simply three days in the past, the submitting mentioned, prosecutors produced practically 750,000 pages of Slack messages from Mr. Wang’s laptop computer. They mentioned the federal government shouldn’t be allowed to make use of proof produced to the protection after July 1, and that different materials, together with proof associated to Mr. Bankman-Fried’s resignation from FTX, must also be omitted of the trial.
“The protection doesn’t have limitless sources and should spend the restricted time left earlier than trial making ready its protection quite than reviewing eleventh-hour productions,” the submitting mentioned.
Over months of investigation, prosecutors have amassed tens of millions of pages of proof as they’ve ready for Mr. Bankman-Fried’s trial, one of many largest troves ever collected in a white-collar securities fraud case introduced by the federal authorities in Manhattan.
The federal government’s courtroom submitting on Monday provided the primary detailed take a look at the proof and the witnesses that prosecutors plan to introduce at trial. The federal government plans to quote spreadsheets maintained by Ms. Ellison, Mr. Singh and Mr. Wang that “saved observe of illicit cash flows between Alameda and FTX,” the submitting mentioned, and to debate the FTX commercials that appeared on TV.
Prosecutors additionally plan to quote Mr. Bankman-Fried’s political giving as proof for the fraud expenses. The submitting cited a textual content message {that a} high-ranking FTX government, Ryan Salame, despatched to a member of the family in November 2021, describing Mr. Bankman-Fried’s plans to make use of political donations to advertise cryptocurrencies in Washington.
The aim of the donations was to “weed out anti crypto dems for professional crypto dems and anti crypto repubs for professional crypto repubs,” Mr. Salame wrote within the message. He added that Mr. Bankman-Fried would “route cash by me to weed out that republican aspect.”
Mr. Salame has been underneath investigation for months, culminating in a raid of his residence in April, although he has not been charged with any crimes. The submitting mentioned he was “unavailable as a witness” as a result of his lawyer had invoked his Fifth Modification proper to not provide self-incriminating info.
A lawyer for Mr. Salame didn’t reply to a request for remark.
However Ms. Ellison, Mr. Singh and Mr. Wang are all anticipated to testify, the submitting mentioned. The prosecutors mentioned they might additionally name different former FTX and Alameda workers, together with somebody who “repeatedly consulted with the defendant about FTX’s fund-raising efforts.”
The testimony from Ms. Ellison particularly is prone to be essential to the prosecution’s case. Along with operating Alameda, Ms. Ellison was in an on-and-off romantic relationship with Mr. Bankman-Fried.
The submitting offers a transcript of a gathering that Ms. Ellison held with Alameda workers in November 2022, as FTX and Alameda have been collapsing amid a run on deposits. Based on the transcript, an worker requested Ms. Ellison who had made the choice to attract on buyer funds.
“Um … Sam, I suppose,” she replied.
Matthew Goldstein contributed reporting.