Prosecutors within the prison case in opposition to Sam Bankman-Fried, the founding father of the collapsed cryptocurrency trade FTX, on Monday supplied essentially the most detailed account up to now of the proof they plan to make use of to convict him at trial in October.
In a 70-page court docket submitting, the prosecutors stated they’d draw on testimony from a few of Mr. Bankman-Fried’s closest advisers, in addition to an knowledgeable witness and different staff of FTX and Alameda Analysis, a crypto hedge fund he additionally based.
The prosecutors additionally stated 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 stated they’d introduce a recording of a gathering wherein Ms. Ellison advised Alameda staff that she had labored with Mr. Bankman-Fried to siphon funds from FTX prospects’ 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 attempting 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 consists of monetary information, spreadsheets, Google paperwork and personal communications, based on the submitting.
Mr. Bankman-Fried’s attorneys submitted their very own memo on Monday, claiming that prosecutors had “repeatedly failed” to fulfill the deadlines for turning over proof to the protection. Simply three days in the past, the submitting stated, prosecutors produced practically 750,000 pages of Slack messages from Mr. Wang’s laptop computer. They stated 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, also needs to be overlooked of the trial.
“The protection doesn’t have limitless assets and should spend the restricted time left earlier than trial getting ready its protection moderately than reviewing eleventh-hour productions,” the submitting stated.
Over months of investigation, prosecutors have amassed hundreds of thousands 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 court docket 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 stated, and to debate the FTX ads 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 way of me to weed out that republican facet.”
Mr. Salame has been beneath investigation for months, culminating in a raid of his dwelling in April, although he has not been charged with any crimes. The submitting stated he was “unavailable as a witness” as a result of his lawyer had invoked his Fifth Modification proper to not supply self-incriminating data.
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 stated. The prosecutors stated they’d additionally name different former FTX and Alameda staff, together with somebody who “usually consulted with the defendant about FTX’s fund-raising efforts.”
The testimony from Ms. Ellison specifically is prone to be essential to the prosecution’s case. Along with working Alameda, Ms. Ellison was in an on-and-off romantic relationship with Mr. Bankman-Fried.
The submitting supplies a transcript of a gathering that Ms. Ellison held with Alameda staff in November 2022, as FTX and Alameda have been collapsing amid a run on deposits. In accordance with 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.
