In a recent ruling, it was decided that Sam Bankman-Fried is not permitted to hold FTX’s legal team accountable for the company’s downfall or operational issues in his preliminary defenses. However, the possibility of an “advice-of-counsel” defense remains open for exploration at a later stage, according to the presiding federal judge.
The Judge’s Stand on the ‘Blame Lawyers Opening Statement Judge’ Scenario
Judge Lewis Kaplan expressed concern that without specific details, such an argument might lead to confusion or bias among the jury. As a result, in his order, he restricted the defense team from referring to external counsel in their opening statements. Nevertheless, the option to revisit this issue remains open, provided the judge and the Department of Justice (DOJ) are informed ahead of time, and the jury is not present during the discussion.
The Defense Team’s Strategy
Earlier this year, Bankman-Fried’s defense team informed the DOJ and the court of their intention to argue that FTX’s legal advisors were part of certain decision-making processes within the company. In August, they announced that Bankman-Fried would argue that both FTX’s internal attorneys and the legal team from Fenwick & West were involved in several key decisions. These include the use of auto-deleting messaging services like Signal, the creation of the “North Dimension” entities, FTX’s banking relationship with Silvergate Bank, loans to FTX and Alameda Research executives, intercompany agreements, and FTX’s terms of service.
The DOJ’s Objection
The DOJ, however, contended that Bankman-Fried’s defense team had not provided sufficient detail on its argument, and therefore should be barred from making it. The judge concurred, noting that the wording of the various filings raised questions about what would constitute an ‘undue’ focus on attorney involvement and what could suggest that attorneys had inappropriately ‘blessed’ a certain course of action. The judge further emphasized that the allowance of arguments or evidence regarding lawyer involvement would depend on the circumstances.
The trial of Bankman-Fried is set to begin on October 3, with jury selection commencing on the same day. As you follow this trial, consider using cryptoview.io to stay updated on the latest developments in the world of cryptocurrency and finance.
