Bankman-Fried has pleaded not guilty. In a letter disclosed to the court, Mark Cohen, Bankman-Fried’s lawyer, argues that FTX’s legal advisers, which included Silicon Valley law firm Fenwick & West, “gave him assurance he was acting in good faith” when he used apps that automatically deleted records at FTX and set up huge loans to company executives.
The letter named three other FTX lawyers involved in “approving decisions”. Meanwhile, Bankman-Fried has publicly criticised another law firm FTX used, Sullivan & Cromwell, for allegedly pressuring him into declaring bankruptcy. In the bankruptcy case, Sullivan & Cromwell called Mr Bankman-Fried’s claims “false”.
Fenwick & West declined to comment. Sullivan & Cromwell did not respond to requests for comment.
Martin Auerbach, head of the white collar and investigations practice at the law firm Withersworldwide in New York, says Bankman-Fried is likely to try to show he had “surrounded himself with the best and brightest and paid them a lot of money” to advise him on the legality of his actions.
Typically, this also requires the defendant to provide evidence they had given their lawyers the information they needed to provide solid advice.
Bankman-Fried’s lawyers told the court the advice he received from legal advisers was “relevant to rebut” the government’s argument that he acted with criminal intent.
Within days of FTX’s failure ,Ellison, who led Bankman-Fried’s ostensibly separate crypto hedge fund, had signed a guilty plea agreement.
In July, the New York Times published excerpts from her private diaries, which a judge decided had likely been leaked by Bankman-Fried to “frighten” her.
After the leak, Bankman-Fried was returned to prison and his $250m bail revoked. Since then the former crypto prodigy has waited behind bars for his trial to begin.
For the prosecution, evidence related to Ellison could be crucial to proving “criminal conspiracy”, according to a court filing. Days before FTX failed, Ellison addressed staff.
Asked who had authorised taking money from FTX customers to fund its high-risk hedge fund, Ellison said: “Um… Sam I guess.”
Should he be found guilty, Bankman-Fried could sentenced to 115 years in prison.
