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Expert Witnesses Demand $1,200 an Hour to Testify in FTX Co-Founder’s Fraud Trial

As FTX co-founder Sam Bankman-Fried’s October fraud trial approaches, an unusual surprise has arisen, spotlighting his defense strategy. According to a recent Bloomberg Law story, Bankman-Fried is preparing to bring in a lineup of seven expert witnesses to testify on his behalf in a federal court in Manhattan, perhaps paying them a staggering $1,200 per hour.

The witnesses will discuss various critical issues, including campaign funding laws, the valuations of FTX and its affiliate Alameda Research, and the complicated software architecture and terms of service underpinning the Bitcoin exchange. These revelations shed light on Bankman-Fried’s strategy as he confronts allegations of conducting a vast multibillion-dollar swindle.

According to the same article, prosecutors have several of Bankman-Fried’s former associates and pals lined up to testify against him. However, in August, Judge Lewis A. Kaplan struck a blow to the defense by revoking Bankman-Fried’s bail due to evidence suggesting witness tampering in two separate instances.

Bankman-Fried, who has maintained his not guilty plea on all allegations, has declined to comment on the situation through his spokeswoman to Bloomberg. Notably, federal prosecutors are attempting to prevent the participation of expert witnesses, claiming that their testimony would only focus on Bankman-Fried’s alleged lack of criminal knowledge or intent based on talks with others.

The exchange of letters between the prosecution and Bankman-Fried’s defense team delves into his incarceration conditions and essential issues such as evidence disclosure and internet access. The defense sought to exclude discovery material obtained after July 1, but the judge denied this request, arguing that charges of broken commitments and missing deadlines were unsubstantiated.

Bankman-Fried’s lawyers are seeking additional access to their client while assembling a team of expert witnesses to bolster his defense. Bradley Smith, a former Federal Election Commission Chairperson, is one of them, charging an astonishing $1,200 per hour. Smith’s knowledge will provide insights into the complex network of political finance regulations in the United States and the realm of straw donors.

Other witnesses, whose hourly rates range from $400 to $1,100, will also be crucial. Peter Vinella, a financial services industry consultant, will share his views about acceptable procedures in the banking sector. In contrast, Professor Andrew Di Wu will share his knowledge of blockchain technology and the cryptocurrency market crash.

Bankman-Fried’s defense approach may also rely on the advice of counsel defense, which seeks to demonstrate that FTX’s legal counsel led his actions. This sophisticated legal dance continues in the face of three Bankman-Fried’s closest associates pleading guilty to fraud and pledging to cooperate with the government.

Allegations against Bankman-Fried include the mixing of customer funds, the diversion of exchange funds for executive loans, real estate acquisitions, and high-risk trading, all of which are said to have contributed to FTX’s demise in November 2022.

Including expert witnesses and the counsel defense strategy will emerge as crucial factors defining the case’s eventual outcome as the trial date approaches. The high-stakes struggle between the prosecution and the defense heats up, with both parties vying to present compelling evidence and persuasive arguments in court.

 

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