FTX's Bankman-Fried Cannot Blame Lawyers in Opening Statement: Judge

Sam Bankman-Fried's defense team can't stress the role of attorneys at Fenwick & West in his opening statement, but can still try raising the "advice-of-counsel" defense later in the trial, Judge Lewis Kaplan said Sunday.

AccessTimeIconOct 1, 2023 at 4:38 p.m. UTC
Updated Oct 2, 2023 at 3:10 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Sam Bankman-Fried cannot blame FTX's lawyers for its collapse or operations in his opening statements, though he can still try and make a so-called "advice-of-counsel" defense later, the federal judge overseeing his case ruled Sunday.

Bankman-Fried's defense team told the Department of Justice and the court earlier this year that he intended to argue that FTX counsel "were involved" in certain decisions that the company made. But this argument, without specifics, may confuse or prejudice a jury, Judge Lewis Kaplan wrote in an order dated Sunday. While he blocked the defense team referring to external counsel in his opening statement, Bankman-Fried's attorneys can try to raise the issue later if they notify the judge and DOJ first, without jurors in the room.

The defense team announced in August that Bankman-Fried planned to argue that both in-house FTX attorneys and lawyers with the firm Fenwick & West were involved in decisions to use auto-deleting messaging services like Signal, creating the "North Dimension" entities, FTX entities' banking relationship with Silvergate Bank, loans to FTX and Alameda Research executives, intercompany agreements and FTX's terms of service. The DOJ argued that Bankman-Fried's defense team had not provided enough detail on its argument, and should be blocked from making it.

In his ruling, the judge said the phrasing of the various filings raise questions about "what would constitute 'undue' focus on attorney involvement," "what could suggest inappropriately that attorneys had 'blessed' a particular course of conduct" and what legal theory would allow evidence that met the first two questions.

"Whether and to what extent the defendant should be permitted to argue or adduce evidence regarding the presence or involvement of lawyers will depend on the circumstances. The best that can be done for now is to ensure that the Court will have sufficient notice to make appropriate rulings on a case-by-case basis," the judge wrote.

Bankman-Fried will go on trial starting Oct. 3, when jury selection will kick off.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.