United States prosecutors have filed a request with the court overseeing Sam Bankman-Fried’s trial, urging that his legal team be prohibited from presenting arguments related to the potential recovery of FTX customer assets invested in Anthropic, an artificial intelligence startup. This request comes in the midst of allegations that Bankman-Fried’s investment in Anthropic, totaling $500 million in April 2022, was funded using misappropriated funds from FTX customer deposits.
Anthropic has been in the spotlight recently as it seeks fresh investments from notable companies like Amazon and Google, which could potentially result in a valuation ranging from $20 billion to $30 billion. U.S. prosecutors contend that the increasing valuation of Anthropic would also boost the value of Bankman-Fried’s investment, potentially facilitating the recovery of funds for FTX customers and other creditors involved in the FTX bankruptcy.
According to a letter submitted to Judge Lewis Kaplan, legal teams representing both the U.S. government and Bankman-Fried discussed various issues related to cross-examination of witnesses. Bankman-Fried’s legal team intends to present evidence concerning the current value of his $500 million investment in Anthropic in 2022.
However, the prosecutors argue that this evidence is intended to support the notion that FTX customers and other victims would be fully compensated for their losses, which the court has previously deemed an “impermissible purpose.” They claim that such evidence would be entirely irrelevant and could introduce unfair prejudice, confusion, misdirection, delays, and time wastage.
The government emphasizes that the charges against Bankman-Fried primarily revolve around allegations of wire fraud involving the use of FTX customer deposits for investments and other expenditures. Therefore, any discussion of potentially profitable investments is deemed immaterial and irrelevant to the charges under consideration.
Furthermore, the government asserts that while it plans to present evidence of Bankman-Fried’s alleged misappropriation of customer deposits resulting in substantial losses on FTX’s balance sheet, it does not intend to introduce any evidence regarding the ultimate losses incurred by victims once the FTX bankruptcy process concludes.
The trial, closely monitored by our correspondent in New York, has thus far centered on establishing how approximately $8 billion of FTX customer funds went missing from the collapsed cryptocurrency exchange during its initial week.
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