Aug 23, 2023

Sam Bankman-Fried's defense team published a letter detailing a planned "advice of counsel" strategy, which argues that the FTX founder was acting in "good faith" in loaning funds to FTX and Alameda executives because he was following the advice of lawyers, including law firm Fenwick & West.

Video transcript

Sam Baman, freed, of course, founder of FTX, who is behind bars right now awaiting a criminal trial in October um has revealed part of his defense. We've known this, I I think at least for some days now, the defense strategy that he intends to use is called the advice of counsel strategy. And this would be essentially blaming counsel and his lawyers for giving him poor advice, which then led to the implosion of FTX. He intends to argue that he was acting in good faith when loaning funds to Alameda and FTX executives in sending signal messages to auto delete and in setting up a set of North American entities because that's what his lawyers advised him to do. Uh the law firm that is at the middle of this is Fenwick and West. I don't do not believe that we know the attorney's name that he plans to um to say, gave him, gave him this advice, but we do know the firm. Now, uh Zach gonna toss this off to you. We had a guest on first mover recently who said this is a Hail Mary move. It is like the last resort in defenses that you can use. And that is not a quote, but that is essentially what he was saying. What do you make of this? Just another twist and turn in what is an increasingly strange legal saga, right? You, you really don't know what to believe with SPF at this point. You don't know what to make of these various public statements that he's made. You don't know if this has any chance of being a useful strategy to him. You don't even know if he was actually advised the way he was saying that he was advised now. So it is really hard to judge a lot of these things because we get a lot of this uh sort of, I don't know, two face talk out of Samba and freed uh while this crisis was unfolding and subsequently. So it's really kind of hard to say what's what here. Um But it certainly is maybe again that hail Mary effort to uh shorten or curtail the amount of time that SPF will spend behind bars. But yeah, I don't know. It seems, seems to be a bit grasping at straws. I don't know. I'd be curious to see if this carried any weight um in the court of law, but obviously, time will tell and we'll see that in October in New York, it's shaping up to be again, prime time, must, must view uh court experience. So I don't know, will I, I'm tempted to throw it back to our legal expert, Jenna, but I will throw it to you for your, your thoughts. I mean, I would give it to the legal expert. So Lily plump over here. Uh, now I'll, I'll take it really quickly. Um, this is the trial of the century, right? So we're gonna see what, what Samri is gonna come up with while he's in jail right now and try to figure out his defense. It's not looking good though, right? Like, look at all the things that are alleged against him even this week. He was back in court for two more indictments about uh money laundering and related to transferring of funds over wire. Uh those I think came from the Treasury Department. So it's got a lot to deal with here and I, I don't know if like his counsel and this whole strategy is going to fit for all those things, right? Like maybe it helps him out on a few counts. That would probably be a best case scenario. That would be my imagination here running wild, but things look really bad. They have all this documentation from the company, right? Like all this information was handed over fair fairly quickly. We think back to just last year when Sam make free resigned in a matter of like a few days he was gone, right? And then all that information was basically locked in time for now. Uh everyone to go through and pick apart his eventual defense in this case. So it's not like good. I don't love the strategy, but if you're gonna say I'm not guilty, then you have to come up with something. I'll throw real windy for your thoughts. I have the hottest take out of everyone on the show. I don't care. I literally don't care what happens to him. I don't care about the legal system. It's never gonna be fair. If you have family with money and resources, you're always gonna be a step ahead of the underdogs. I just want, you know, I want the courts to figure this out as fast as possible for everybody that got, got by FTX and then is struggling in a bankruptcy court because the more time they waste on this doesn't matter if it's a criminal stuff or it's the actual bankruptcy stuff because it's all interrelated. It's just going to continue to take money from creditors. And as we have seen with different bankruptcy cases, with crypto asset exchanges in the past the courts and the attorneys and everybody just really takes advantage of the people um of retail and everybody that's uh that was kind of associated and got caught off guard. Um And that's just really what it is. They just spend money on attorneys and it just at the end of the day, less money goes to the creditors, the people that really got scammed and got screwed over. So I just, I don't care anymore. I don't care if he's eating bread and water. I don't care if he's a little bit uncomfortable. He did something bad. Um, he got caught doing it generally when my daughter does something bad, we do a little bit of a time out. You know, we start working on that and just the fact that his parents are not taking really any, any accountability. They haven't been questioned. Where the heck is Sam Buco? I just don't care anymore. I mentioned we had a lawyer on first mover recently and asked if there has been precedent set, has this kind of defense been successfully used before? Um, and he said again, not a direct quote and may be exaggerating a little bit for dramatic effect, but I will try not to. He said that when he's seen this before, the lawyers really just kind of lay the defendant out to dry at the end at the end of the day, these lawyers are lawyers, right? They're not going to come out and say, you know, yeah, of course, I told him to do all of these alleged crimes that we're sitting here for and they definitely have the receipts to back it, back it up. And so I'm curious, I think it's gonna be Zach, like you said, a very dramatic trial that will all be sitting on the edge of our seats watching, especially, uh when this firm and the attorneys at this firm take the stand, it will be interesting to hear their side of the story. And of course, we have all of the other people who are involved in all of these alleged crimes. Um, on the other side, you know, they're, they're going to take the stand for the prosecution. They're gonna tell the story from their perspective. And I just don't think it looks good for Sam Bakeman Fried when everybody else is saying, yeah, we did this. Yeah, we messed up. We are guilty. And Sam is the only one out here saying my lawyer said it was ok. So I'm not guilty. That is, but the thing is that's like such typical behavior of somebody that comes from that type of privilege to come out and say it really is like he has no awareness of what he actually did or the people impacted around him. And he just kind of say no, I didn't do it. It was just a mistake or you know, this happened or this happened or this happened. I think it's absolutely pathetic and I wish his attorneys would just tell him to shut up and I wish he would also shut up as well, but I don't think that will end up happening and he will continue to incriminate himself. So I just don't care. I want this to be over with everyone to get their money back or some of their money back.

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 to register and buy your pass now.