U.S. District Judge Lewis Kaplan has issued a significant ruling allowing prosecutors from the United States Department of Justice (DOJ) to present evidence related to Sam Bankman-Fried’s political donations in his upcoming fraud trial.
The decision, part of a 16-page pretrial order issued on September 26, sheds light on what evidence will be admissible during the trial, slated to commence on October 3.
Initially, federal prosecutors had charged Bankman-Fried with various offenses, including conspiring to violate U.S. campaign finance laws, alongside seven other fraud and conspiracy charges.
However, these campaign finance charges were dropped as part of an extradition agreement with the Bahamas.
Judge Kaplan justified the inclusion of evidence pertaining to Bankman-Fried’s political contributions by stating, “Evidence that the defendant spent FTX customer funds on political contributions is direct evidence of the wire fraud scheme because it is relevant to establishing the defendant’s motive and allegedly fraudulent intent.”
Furthermore, the judge granted the prosecution’s request to introduce evidence detailing Bankman-Fried’s alleged involvement in creating the FTX Token and his purported instructions to manipulate the token’s price through Alameda Research, then led by CEO Caroline Ellison.
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Kaplan reasoned that the alleged manipulation of cryptocurrency tokens, impacting Alameda’s financials, was an integral part of the alleged conspiracy, making it admissible.
Kaplan emphasized that Bankman-Fried’s alleged instructions to Ms. Ellison were indicative of a “relationship of mutual trust” and that the evidentiary value outweighed concerns of unfair prejudice.
Notably, while allowing certain evidence for the DOJ, Kaplan also permitted Bankman-Fried’s defense team to question government witnesses, including Ellison, former FTX engineer Nishad Singh, and FTX co-founder Gary Wang, about their recreational drug use, provided they informed the court in advance.
Kaplan rejected DOJ motions to restrict the defense’s cross-examination of witnesses on privileged matters and ruled against Bankman-Fried discussing details of his pre-trial detention, family background, wealth, or age before the jury.
In this complex legal battle, the admissibility of evidence surrounding political donations and cryptocurrency manipulation adds a new dimension to the forthcoming trial of Sam Bankman-Fried, a high-profile figure in the cryptocurrency industry.
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