Federal prosecutors in the upcoming trial against former crypto executive Sam Bankman-Fried are seeking to call former FTX customers, investors, and employees, according to the Department of Justice (DOJ). The aim is to have these individuals testify about their experiences and expectations regarding FTX and its handling of funds. The DOJ intends to present testimony from customers and investors who held FTX shares to provide insights into how they expected FTX to manage their funds.
DOJ wants investors to discuss their interactions with SBF
Additionally, cooperating witnesses will be called upon to discuss their interactions with Sam Bankman-Fried and their understanding of his statements and actions. The testimony from these witnesses is crucial as it pertains directly to the disputed issues in the trial and sheds light on how reasonable individuals would have interpreted the representations made by Bankman-Fried regarding FTX’s treatment of customer assets and other matters.
The Department of Justice (DOJ) plans to call both retail customers who transferred substantial assets, often tens of thousands of dollars, and institutional clients who moved significant sums, often tens of millions of dollars, to FTX with the expectation that the exchange would serve as a custodian for these funds. While the specific witnesses were not identified in the documents, it was noted that the customer witnesses are expected to testify for less than 30 minutes each and will require minimal, if any, exhibits.
The prosecution did reveal the names of three cooperating witnesses who had pleaded guilty to charges related to the exchange and would testify in the trial. These witnesses are former FTX Chief Technology Officer Gary Wang, former FTX Head of Engineering Nishad Singh, and former Alameda Research CEO Caroline Ellison. Another former FTX executive, Ryan Salame, had also pleaded guilty to charges but had not agreed to testify as of the most recent update.
FTX customer-1 and the challenges of testifying from abroad
Additionally, the DOJ intends to call at least two more witnesses who will testify under a grant of immunity, although their identities have not been publicly disclosed. One of the prospective customer witnesses referred to as “FTX Customer-1,” resides in Ukraine, making it challenging for them to travel to the United States due to both legal and logistical reasons. Given the ongoing war in Ukraine, the customer needs government permission to leave the country.
Furthermore, arranging travel for this witness would take approximately three days each way and require multiple forms of transportation. To address these challenges, the Department of Justice (DOJ) has requested permission from the judge to allow this witness to testify via video conference, with supervision by a U.S. government official, possibly at the embassy. However, the defense has expressed disagreement with this motion. The government faces significant hurdles in arranging for overseas FTX customers to testify.
Some of these hurdles include coordinating with local authorities, managing time zone differences, and handling potential travel delays, all while incurring substantial costs. Despite these challenges, the government is actively working on arrangements for some overseas FTX customers to travel to New York to provide in-person testimony. Sam Bankman-Fried’s trial is scheduled to begin next week, with jury selection starting on October 3. Opening statements could commence as early as October 4.
