Federal prosecutors are seeking to call former FTX customers, investors, and employees as witnesses in the upcoming trial against Sam Bankman-Fried, a former crypto executive. The Department of Justice confirmed this in a pair of filings on Saturday.
The purpose of calling these witnesses is to have them testify about their expectations regarding how FTX would handle their funds. The customers and investors who owned FTX shares can provide insights into their understanding of FTX’s treatment of their funds. Additionally, cooperating witnesses can speak to their interactions with Bankman-Fried and their interpretation of certain statements and actions made by him.
According to a letter signed by Assistant U.S. Attorney Thane Rehn, the anticipated testimony of these witnesses is crucial for the issues in dispute at trial, as it provides insight into how reasonable people would have interpreted Bankman-Fried’s representations regarding FTX’s treatment of customer assets and other matters.
The DOJ’s plan is to call both retail customers who transferred large sums of assets and institutional clients who moved millions of dollars’ worth of assets to FTX with the expectation that the exchange would safely keep these funds.
While the letter did not reveal the identities or the exact number of the prospective witnesses, it mentioned that the customer witnesses are likely to testify for less than 30 minutes each and involve minimal exhibits. In addition to these witnesses, the DOJ identified three cooperating witnesses who have already pleaded guilty to charges related to the exchange and will testify.
One of the customer witnesses, referred to as “FTX Customer-1,” resides in Ukraine and faces logistical and legal challenges in traveling to the U.S. due to the ongoing conflict in the country. The Department of Justice is requesting permission for this witness to testify via video conference, supervised by a U.S. government official, possibly at the embassy. However, the defense has not agreed to this motion.
The DOJ acknowledged the complexities involved in arranging the testimony of overseas FTX customer witnesses. It requires coordination with local authorities, arranging multi-day travel itineraries, accommodating time changes and travel delays, and incurring significant costs. Despite these challenges, the government is currently making efforts to arrange for some overseas FTX customers to travel to New York to testify.
As the trial against Sam Bankman-Fried approaches, the inclusion of these witnesses will provide valuable insights into the relationship between FTX and its customers, shedding light on their expectations and interpretations of Bankman-Fried’s actions and statements. Ultimately, their testimony will help determine how reasonable individuals would have understood FTX’s handling of customer assets and other relevant issues.
