'Absolutely Not': FTX's Former General Counsel Says He Never Approved Loans of Customer Funds

Can Sun, FTX's general counsel from August 2021 to the time of the exchange’s collapse in November 2022, testified in the Sam Bankman-Fried fraud trial.

AccessTimeIconOct 19, 2023 at 4:13 p.m. UTC
Updated Oct 20, 2023 at 3:39 p.m. UTC
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NEW YORK – FTX’s general counsel “never approved” the crypto exchange lending customer funds to sister firm Alameda Research, he told the jury on day 12 of Sam Bankman-Fried’s criminal fraud trial.

Can Sun, who was the general counsel at FTX from August 2021 to the time of the exchange’s collapse in November 2022, said “absolutely not” when asked Thursday whether he signed off on Alameda’s use of FTX customer funds.

Sun testified he believed FTX customers' funds were kept segregated from the company’s own funds, based on conversations he’d had with Bankman-Fried.

Assistant U.S. Attorney Danielle Sassoon walked Sun through FTX’s terms of service and other public statements supporting the Department of Justice’s thesis that FTX misappropriated customer funds.

Various documents said FTX customer funds were supposed to be “ring-fenced” from FTX’s own funds, Sun said.

Can Sun, former FTX general counsel, leaves a New York courthouse after testifying against Sam Bankman-Fried on Oct. 19, 2023. (Nik De/CoinDesk)
Can Sun, former FTX general counsel, leaves a New York courthouse after testifying against Sam Bankman-Fried on Oct. 19, 2023. (Nik De/CoinDesk)

Sun, who testified under a non-prosecution agreement, also described how he tracked loans to FTX and Alameda executives – but his record of the loans did not match another document the DOJ showed him, he said.

Throughout his testimony, he reiterated that he did not know customer funds were involved in those loans.

After a brief cross-examination, Sun wrapped his testimony in the late morning.

From $60 million to zero

Robert Boroujerdi, a director at Third Point, the investment firm founded by Dan Loeb, briefly took the stand, testifying that his company invested $60 million in FTX.

The investment is now worth $0, he said.

Third Point saw both audited and unaudited financials, said Boroujerdi, a veteran of Wall Street investment banking colossus Goldman Sachs.

Sketch of Can Sun, former general counsel for FTX (Nik De/CoinDesk)
Sketch of Can Sun, former general counsel for FTX (Nik De/CoinDesk)

The trial will resume next Thursday, Oct. 26, with the DOJ's final witnesses. Prosecutors said at the opening of Thursday's session that they expected to wrap up quickly after the week-long break. The defense will begin presenting its case – if it chooses to do so – after lunch on Thursday, Oct. 26.

Bankman-Fried has not yet said whether he will testify in his defense.

Edited by Marc Hochstein.


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Nikhilesh De

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

Elizabeth Napolitano

Elizabeth Napolitano was a news reporter at CoinDesk.


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