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FTX: ‘Crypto King’ tells judge he acted on legal advice

In the ongoing trial of former crypto boss Sam Bankman-Fried, he has testified to a judge, stating that he acted on legal advice when making certain decisions related to his now-bankrupt cryptocurrency exchange, FTX. The judge has sent the jury home temporarily to determine which portions of Bankman-Fried’s testimony can be admissible as evidence. Bankman-Fried defended his actions, including setting group chats to delete automatically, by stating that it complied with record-keeping policies established by his legal team. Prosecutors have objected to his argument, claiming that it is irrelevant if the attorneys were not fully informed. As the judge decides which testimony will be permitted, Bankman-Fried faces potential conviction and a lifetime prison sentence. Despite the risks, analysts believe he may choose to testify in his own defense in an effort to undermine the prosecution’s case.

FTX: ‘Crypto King’ tells judge he acted on legal advice

FTX: Crypto King tells judge he acted on legal advice

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Background

In a high-profile trial, former crypto boss Sam Bankman-Fried has testified before a judge, presenting arguments that he acted on legal advice in good faith. The 31-year-old entrepreneur is facing allegations of lying to investors and lenders, as well as stealing money from customers of his now-bankrupt cryptocurrency exchange, FTX. The judge, Lewis Kaplan, initially sent the jury home to review which parts of Bankman-Fried’s testimony can be presented as evidence.

Former Crypto Boss Testifies in Court

After the jury was dismissed, Bankman-Fried had the opportunity to speak directly to Judge Kaplan, allowing the lawyers to practice before potentially speaking in front of the jury. Bankman-Fried defended several controversial decisions that had been questioned by prosecutors, including the use of automatic deletion in group chats, which he argued complied with record-keeping policies established by his legal team.

FTX: Crypto King tells judge he acted on legal advice

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Arguments based on Legal Advice

Bankman-Fried’s defense heavily relied on arguments that he acted in accordance with legal advice. He mentioned that his legal team had provided guidance on various arrangements, such as personal loans and the role of Alameda as a “payments processor” for FTX. Bankman-Fried expressed trust in his legal team, stating that he took comfort from the fact that lawyers had structured the loans.

Judge’s Decision on Testimony

Although Judge Kaplan did not immediately rule on which portions of Bankman-Fried’s testimony would be admissible, he expressed skepticism about some of the arguments presented. He cautioned that he was dubious about the validity of certain claims. The judge will make a final ruling in the morning regarding what Bankman-Fried can present before the jury.

FTX: Crypto King tells judge he acted on legal advice

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Defending Controversial Decisions

Bankman-Fried’s defense team aimed to defend his controversial decisions by emphasizing that they were made based on legal advice. The use of automatic deletion in group chats, for example, was justified as a record-keeping policy established by his legal team. Bankman-Fried’s attorneys argued that these decisions were reasonable business practices, given the rapid growth of his companies.

Discussion of Group Chats and Record Keeping

The topic of group chats and record keeping emerged during Bankman-Fried’s testimony. He explained that many arrangements and discussions had taken place with his legal team, and he trusted that they were following proper forms. The prosecution, however, objected to Bankman-Fried’s reliance on legal advice, claiming that it was irrelevant if the attorneys were not fully informed.

FTX: Crypto King tells judge he acted on legal advice

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Trust in Legal Team

Bankman-Fried emphasized his trust in his legal team throughout his testimony. He expressed confidence that his lawyers had prepared the necessary applications for bank accounts and structured the loans properly. Bankman-Fried’s belief in the abilities of his legal team reflected his reliance on their guidance in making important business decisions.

Prosecutors’ Objections

Prosecutors challenged Bankman-Fried’s arguments, asserting that the relevance of legal advice was limited if he had not provided complete information to his attorneys. They argued that acting in good faith based on incomplete or misleading information did not absolve Bankman-Fried of potential wrongdoing.

FTX: Crypto King tells judge he acted on legal advice

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Fraudulent Allegations and Defense Arguments

The defense aimed to counter the fraudulent allegations by presenting Bankman-Fried’s decisions as reasonable and based on legal advice. They argued that the entrepreneur had never intended to commit fraud and acknowledged that managerial mistakes had occurred but stressed that they were not part of a fraudulent scheme. Bankman-Fried’s defense team sought to undermine the prosecutors’ narrative by presenting their own version of events, highlighting the rapid growth of his companies and the inherent risks faced.

In the ongoing trial, Bankman-Fried’s decision to testify presents both risks and potential rewards. While testifying grants him an opportunity to present his side of the story and challenge the prosecutors’ case, it also exposes him to rigorous cross-examination. The jury’s perception and belief in his testimony could directly impact the final verdict in the case.

Despite the risks, experts following the trial believe that Bankman-Fried testifying may be advantageous. The defense team has acknowledged the strength of the prosecution’s case but believes that presenting their own version of events could sway the jury in Bankman-Fried’s favor. The trial continues, and a decisive ruling from Judge Kaplan regarding the admissibility of Bankman-Fried’s testimony is yet to come.

Source: https://www.bbc.co.uk/news/business-67221161?at_medium=RSS&at_campaign=KARANGA