Jailed FTX founder Sam Bankman-Fried’s purported defense plan to blame his former counsel for the fraud committed during his tenure has met stiff resistance. The Department of Justice [DOJ] has countered the indicted exec, asserting that the court should dismiss “irrelevant, confusing, and prejudicial questioning, evidence, and arguments about the involvement of attorneys” unless specific details are provided by Bankman-Fried.
In a legal filing on August 29, U.S. Attorney Damian Williams emphasized that Bankman-Fried ought to either clarify the legal advice he received or abandon his proposed defense related to attorney involvement. This disagreement centers around the suitability of including certain elements in his defense strategy for his upcoming October trial. Bankman-Fried is facing multiple counts of fraud following the collapse of his crypto exchange in November 2022 and has pleaded not guilty.
Williams accused Bankman-Fried of providing false information to Silvergate Bank to establish a bank account for his firm, North Dimension. He argued that pinning blame on his former lawyers is “irrelevant” without a clearer connection to the alleged misconduct, as they were not aware of his intention to use it for processing customer funds.
Bankman-Fried had hinted that he might attribute blame to his former counsel at the Fenwick & West law firm as part of his defense. The U.S. Attorney also addressed the issue of the automatic deletion of Signal messages by FTX employees and the creation of loan agreements using customer funds.
FTX: SBF’s Lawyer Responds
In response to the government’s filing, Bankman-Fried’s lawyer, Mark Cohen, asserted that the defense strategy had been adequately disclosed given the circumstances. Cohen then directed the court’s attention to the alleged pitiful conditions in which Bankman-Fried is locked up in jail, which are allegedly in violation of his Sixth Amendment rights, impeding his ability to adequately prepare for trial.
Cohen specifically raised concerns about the “woefully inadequate” internet access provided to his client. The ongoing legal battle between Bankman-Fried and the Department of Justice underscores the intricate negotiations surrounding the admissibility of certain aspects of his defense as the trial approaches.
The other day, U.S. prosecutors made their intention public to employ the personal diary of Caroline Ellison, former CEO of Alameda Research, FTX’s sister trading firm, as a piece of evidence against the indicted founder. This unexpected turn has significantly altered the dynamics of SBF’s defense strategy.