In the countdown to the much-anticipated trial of former FTX CEO Sam Bankman-Fried, a.k.a. SBF, a surprising twist has emerged. Judge Lewis Kaplan, presiding over the case, has made a crucial ruling that could significantly impact the proceedings. Kaplan declared that SBF and his legal team cannot initially hold FTX company lawyers accountable for decisions made during his tenure. This ruling effectively blocks the use of the “advice of counsel” defense in the defense’s opening statements, granting a request made by the prosecution.
The judge’s decision stemmed from concerns that introducing the “advice of counsel” defense right at the beginning of the trial could create confusion and unfair bias against the government’s case. Kaplan expressed worries that focusing on the involvement of lawyers at FTX and Alameda, Bankman-Fried’s affiliated companies, might lead to misconceptions and prejudice the jury against the prosecution.

To understand this scenario better, imagine SBF as a player in a game, with his lawyers acting as the ones explaining the rules. In this context, if Bankman-Fried claims he didn’t break any rules because his lawyers assured him he was playing the game correctly, it’s akin to saying, “I followed the rules because my advisors said I could.”
However, in a court case, using this strategy has specific rules and timing. If Bankman-Fried immediately asserts, “I didn’t do anything wrong because my lawyers said it was okay,” it might make the jury believe he’s attempting to trick or confuse them. Judge Kaplan’s ruling ensures that the trial remains fair and unbiased, allowing both sides to present their arguments without prejudicing the jury.
SBF Faces Uphill Task
It’s important to note that Bankman-Fried’s potential defense strategy involved placing blame on the Fenwick & West law firm, which advised FTX during his leadership, for any legal missteps. The “advice of counsel” defense hinges on the argument that Bankman-Fried didn’t intend to break any laws because his lawyers had assured him he was operating within legal boundaries during FTX’s growth.
This ruling sets a significant tone for Bankman-Fried’s trial, indicating that he and his legal team would face hurdles in shifting blame onto the company’s legal advisors. As the legal proceedings unfold, the cryptocurrency community closely watches, understanding the potential implications this case could have on the industry and its prominent figures.