FTX Customers, Investors Will Testify Against Sam Bankman-Fried, DOJ Says

Federal prosecutors want to call former FTX customers, investors and employees in its upcoming trial against onetime crypto executive Sam Bankman-Fried, the Department of Justice confirmed in a pair of Saturday filings.

The customers and investors who owned FTX shares can speak to their expectations of how FTX would hold their funds, while the cooperating witnesses can speak to “their interactions with the defendant and their understanding of the purpose of certain statements and actions of the defendant,” a letter signed by Assistant U.S. Attorney Thane Rehn said.

“In each of these cases, the anticipated testimony about how the witnesses understood their relationship with the defendant and his companies, and their interpretation of statements made by the defendant and his agents, is directly relevant to the issues in dispute at trial, and is probative of how reasonable persons would have interpreted and understood representations made by the defendant regarding FTX’s treatment of customer assets and other issues,” the letter said.

The DOJ intends to call retail customers who “transferred tens of thousands of dollars worth of assets” and institutional clients who moved “tens of millions of dollars worth of assets” to FTX, with the expectation that the exchange would custody these funds, the letter said.

The letter did not identify any of the prospective witnesses or say how many the DOJ intends to call. A second letter said the customer witnesses are likely to testify for less than 30 minutes each “and will involve minimal, if any, exhibits.” The DOJ identified former FTX Chief Technology Officer Gary Wang, former FTX Head of Engineering Nishad Singh and former Alameda Research CEO Caroline Ellison as three cooperating witnesses who all pled guilty to charges tied to the exchange and will testify. Another former FTX executive, Ryan Salame, pleaded guilty to charges but hadn’t agreed to testify as of a few weeks ago. The DOJ is also planning to call forward at least another two witnesses to testify under a grant of immunity, but has not publicly identified them yet.

Ukrainian customer

One of the customer witnesses, which the DOJ identified as “FTX Customer-1,” lives in Ukraine and cannot easily travel to the U.S. for both legal and logistical reasons, the second letter said. Because of the war in Ukraine, the customer needs permission from the government to leave the country. Should that permission be granted, the logistics of getting the customer to the U.S. would “take at least approximately three days” (and another three days back) and require multiple forms of travel.

The DOJ is asking the judge to approve testimony via video conference, supervised by a U.S. government official possibly at the embassy, instead of requiring in-person testimony. The defense does not agree to the motion, the DOJ said.

“To obtain likely less than 30 minutes of testimony from overseas FTX customer witnesses, however, requires, for at least some countries, coordinating with local authorities, arranging multi-day travel itineraries to accommodate varying time changes and travel delays, and incurring significant costs associated with such arrangements. Notwithstanding those hurdles, the Government is in the process of arranging for some overseas FTX customers to travel to New York to testify,” the letter said.

Inner City Press first reported on the letter about a Ukrainian witness.

Bankman-Fried’s trial starts next week, with voir dire – the jury selection process – kicking off on Oct. 3. Opening statements may then begin as soon as Oct. 4.

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