- Sam Bankman-Fried may not blame FTX's lawyers for its collapse
- FTX practiced "effective altruism" - aiming for maximum profit to give away later
Federal prosecutors intend to summon former clients and investors in the failed crypto exchange FTX as well as former staff in the upcoming trial against ex-CEO and founder Sam Bankman-Fried, the Department of Justice confirmed, cited by CoinDesk.
The investors and clients who owned FTX shares can discuss what they expected to happen, including in relation to how FTX would hold their funds. Witnesses in the case can discuss their relationships with the defendant and how they understood some of his statements and actions.
He can’t blame FTX lawyers for collapse
Judge Lewis Kaplan, who is overseeing the case, ruled that Sam Bankman-Fried was not justified in blaming FTX’s lawyers for its collapse or operations. Earlier this year, his defense team told the Department of Justice that FTX counsel had been “involved” in some of the company’s decisions.
Those include using auto-deleting messaging services like Signal, loans to FTX and Alameda Research executives, and FTX entities’ banking relationship with Silvergate, which went bankrupt. According to Judge Kaplan, this very broad argument could bias or confuse a jury.
However, the legal team can try to raise the subject at a later time, as long as they inform the DOJ and the judge in advance. Jurors may not be present in the room.
“Risky and ridiculous” actions
In related news, a former software engineer at Alameda Research said “effective altruism” was used to justify ridiculous and risky behavior at the crypto exchange before it collapsed in November 2022.
Aditya Baradwaj told Cointelegraph that this ideology, according to which you should aim for maximum profit so you can give the money away later, played a crucial role in the company’s collapse. Effective altruism made people behave illogically and led company management to rash, unreasonable decisions, according to Baradwaj.
