Former FTX CEO Sam Bankman-Fried, who faces fraud prices over the collapse of the bankrupt cryptocurrency alternate, walks outdoors the Manhattan federal court docket in New York Metropolis on March 30, 2023.
Amanda Perobelli | Reuters
Prosecutors within the felony trial towards FTX founder Sam Bankman-Fried in contrast one of many protection’s arguments to a scene within the 1994 movie “Dumb and Dumber,” by which actor Jim Carrey says IOUs are “pretty much as good as cash.”
In a written transient on Thursday to Decide Lewis Kaplan, who’s presiding over the Manhattan trial, assistant U.S. attorneys for the Southern District of New York took problem with a number of of the jury directions supplied by the protection staff.
One particular directive reminded prosecutors of the 29-year-old comedy about two less-than-intelligent associates, performed by Carrey and Jeff Daniels, who take a cross-country journey to Colorado to return a briefcase full of cash to its proprietor, although the money had truly been left as ransom.
“Should you discover that FTX prospects, after depositing funds with FTX, acquired a credit score to transact on the FTX alternate and due to this fact acquired the proper to withdraw an equal quantity of funds at a later time upon request, that’s inadequate to ascertain that they have been disadvantaged of property,” the jury instruction from the protection says.
A lot of the federal government’s case hinges on billions of {dollars} that FTX, Bankman-Fried’s crypto alternate, siphoned out of buyer accounts and used largely to attempt to cowl up losses at sister hedge fund Alameda Analysis after cryptocurrency costs plunged. Funds additionally allegedly went to paying for issues similar to a $35 million property within the Bahamas and political donations.
Clients have been in the end unable to retrieve a lot of their cash as FTX and Alameda have been concurrently imploding.
The protection, in accordance with prosecutors, is attempting to make the declare to the jury that purchasers nonetheless had a credit score to the funds they deposited even when the cash wasn’t there as a result of it was getting used for different issues. Prosecutors say the argument is “untethered to the info of the case” and {that a} “credit score to acquire funds at a later date, if such funds are in the end accessible, is clearly not the identical, or as useful, as the cash or property itself.”
In a footnote, the prosecution writes, “A preferred film from the Nineteen Nineties illustrates the purpose: a briefcase, as soon as stuffed with cash, will not be the identical as a briefcase later stuffed with IOUs.” In “Dumb and Dumber,” when the briefcase reaches its proprietor, it is stuffed with paper.
“That is pretty much as good as cash, sir,” says Carrey, enjoying the character Lloyd Christmas.
Actor Jim Carrey.
Filippo Monteforte | AFP | Getty Pictures
Mark Cohen, Bankman-Fried’s lead protection legal professional, did not instantly reply to CNBC’s request for remark.
Bankman-Fried, 31, faces seven felony fraud prices tied to the collapse of his crypto empire late final 12 months. Bankman-Fried, who has pleaded not responsible, may face life in jail if convicted.
The primary three weeks of the trial have been highlighted by testimony from Bankman-Fried’s former shut associates, who have been additionally prime executives at FTX and Alameda and have since turned on him, some by plea offers with the federal government. The trial is scheduled to renew late subsequent week and lengthen into November.
On quite a few events, Decide Kaplan has referred to as sidebar conferences with the lead authorities attorneys and Bankman-Fried’s legal professionals, to debate their demeanor within the courtroom. Most not too long ago, on Thursday, Kaplan ripped into legal professionals from each side, specifically telling the prosecution that their newest skilled witnesses knew nothing particular about essential particulars and but referred to as Bankman-Fried’s habits felony. Either side have been warned to do higher and to speak extra with one another.
— CNBC’s Kate Rooney and Daybreak Giel contributed to this report.
WATCH: Prosecution in Sam Bankman-Fried trial wrapping up in coming days
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