In a recent letter addressed to Judge Lewis Kaplan, lawyers representing FTX founder Sam Bankman-Fried outlined their defense strategy, emphasizing the importance of the “counsel advice” approach. 

The letter, dated August 23, 2023, responded to the court’s order directing the defense to address the government’s request for additional disclosures related to the proposed advice-of-counsel defense.

Bankman-Fried’s legal team firmly stated that the government is not “entitled” to further information regarding the specific details and scope of the proposed defense, nor the evidence concerning Bankman-Fried’s reliance on counsel. 

Citing legal precedent, the defense argued that the government’s request for such information exceeded its authority under well-known rules and established case law.

Furthermore, the defense highlighted their previous attempt to obtain records from Fenwick & West LLP, external counsel for FTX and Alameda, which were “relevant” to the conduct alleged in the indictment. 

The application to compel the government to produce these records was denied by the court, leaving the defense unable to obtain valuable evidence reflecting Fenwick’s legal advice. 

Bankman-Fried’s lawyers expressed their frustration at the government’s subsequent request for specific documents, considering the government’s role in hindering their access to the very same documents.

Despite the challenges, the defense intends to present evidence demonstrating Bankman-Fried’s awareness of Fenwick lawyers and in-house counsel, including individuals like Dan Friedberg, Can Sun, and Ryne Miller, who were involved in reviewing and approving decisions related to the matters at hand. 

The defense argued that such evidence is relevant to establishing Bankman-Fried’s good faith and rebutting the government’s claim of criminal intent to defraud.

Legal experts cited the case of Howard v. Securities and Exchange Commission (SEC), where reliance on counsel was considered evidence of “good faith” rather than a formal defense. 

The FTX founder defense drew parallels to this case, emphasizing the importance of Bankman-Fried’s awareness of counsel involvement in matters related to the charges against him.

While the list provided in the letter was not exhaustive, the defense indicated its intent to elicit similar evidence based on the government’s disclosures and the evidence presented at trial. 

They asserted that these additional disclosures were sufficient to put the government on notice of the nature and scope of the reliance evidence they intended to present.

Bankman-Fried’s legal team has strategically revealed their defense strategy in response to the court’s order and the government’s request for additional disclosures. As the trial unfolds, the courtroom will witness the defense’s efforts to emphasize Bankman-Fried’s reliance on counsel and challenge the government’s allegations of criminal intent.

FTX Founder Bankman-Fried is confronted with 12 criminal counts, the charges of which will be divided between two separate trials. The first trial is slated to commence in October 2023, while the second trial is scheduled for March 2024. 

Featured image from iStock, chart from TradingView.com 

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