Federal prosecutors plan to call former FTX customers, investors and employees in the upcoming trial of former crypto executive Sam Bankman-Fried, the Justice Department confirmed in two filings Saturday.
The customers and investors who owned FTX shares can express their expectations about how FTX would hold their funds, while the cooperating witnesses can speak about “their interactions with the defendant and their understanding of the purpose of certain statements and actions by the defendant.” said a letter signed by Assistant U.S. Attorney Thane Rehn.
“In each of these cases, the expected testimony about how the witnesses understood their relationship to the defendant and his companies and how they interpreted the statements of the defendant and his representatives is, and is, directly relevant to the issues at trial.” “Evidence of how reasonable persons would have interpreted and understood defendant’s representations regarding FTX’s treatment of customer assets and other matters,” the letter states.
The DOJ intends to call retail customers who have transferred “tens of thousands of dollars worth of assets” and institutional customers who have transferred “tens of millions of dollars worth of assets” to FTX with the expectation that the exchange will take custody of these funds would, the letter said.
The letter did not name any of the potential witnesses or specify how many the DOJ plans to call. A second letter said that the client’s witnesses will likely testify for less than 30 minutes each, “and that there will be minimal, if any, exhibits.” The DOJ identified former FTX chief technology officer Gary Wang as the one former FTX chief technical officer Nishad Singh and former Alameda Research CEO Caroline Ellison as three cooperating witnesses, all of whom have pleaded guilty and will testify in connection with the exchange. Another former FTX executive, Ryan Salame, pleaded guilty to the charge but did not agree to testify several weeks ago. The DOJ also plans to subpoena at least two other witnesses to testify as part of an immunity grant, but has not yet publicly identified them.
One of the customer witnesses, whom the DOJ identified as “FTX Customer-1,” lives in Ukraine and cannot easily travel to the United States for legal and logistical reasons, the second letter states. Due to the war in Ukraine, the customer needs government permission to leave the country. Should that approval be granted, the logistics of transporting the customer to the U.S. would “take at least approximately three days” (and an additional three days back) and would require multiple forms of travel.
The DOJ is asking the judge to authorize testimony via videoconference, possibly monitored by a U.S. government official at the embassy, rather than requiring in-person testimony. The defense disagreed with the motion, the DOJ said.
“However, in at least some countries, obtaining likely less than 30 minutes of testimony from foreign FTX customer witnesses will require coordination with local authorities, arranging multi-day travel plans to accommodate varying time changes and travel delays, and incurring significant costs.” “Regardless Because of these hurdles, the government is in the process of arranging for some foreign FTX customers to travel to New York to testify,” the letter said.