Key takeaways:
- SBF should not be allowed to mention the recent fundraising efforts of the AI startup Anthropic in his defense.
- The legal team representing SBF intends to offer proof of the market worth of the $500 million SBF invested in Anthropic.
According to the prosecution, Sam Bankman-Fried, the founder of FTX, should not be allowed to mention the recent fundraising efforts of the artificial intelligence startup Anthropic in his defense against allegations brought by the US Department of Justice.
The DOJ has been debating concerns that might come up during witness testimony in SBF’s trial, and the parties “have reached agreement on many of these issues,” according to a document.
They disagree on the defense team’s ability to bring up any concerns regarding the Anthropic fundraising as one example. According to the DOJ, customer funds were used to invest $500 million in Anthropic in 2022. According to the document:
“Evidence regarding the current value of the defendant’s investments could only be used to support the argument that FTX customers and/or other victims will ultimately be made whole, which the Court has recognized is an impermissible purpose,”
US prosecutors point out that recent reports on the possibly high firm valuation would also raise the value of SBF’s stake, which might improve the likelihood that FTX consumers and other creditors will receive a larger recovery in the FTX bankruptcy.
The legal teams representing the US government and SBF discussed several topics that could come up during the cross-examination of witnesses, according to the letter provided to Judge Lewis Kaplan.
In April 2022, SBF invested $500 million in the artificial intelligence startup. The American government will show proof that money taken from FTX customers’ savings was used to finance the Anthropic investment.
The legal team representing SBF intends to offer proof of the current market worth of the $500 million that the former CEO of FTX invested in Anthropic last year.
According to the prosecution, this information is intended to be used to prove that victims of FTX will receive full restitution for their losses, which the court has already stated is an “unpermissible purpose”:
“Such evidence would therefore be wholly irrelevant, and present a substantial danger of unfair prejudice, confusing the issues, misleading the jury, undue delay, and waste of time.”
The US government asserts that the main focus of its indictment against SBF is allegations of wire fraud involving the use of FTX client deposits for investments and other outlays.
The prosecution contends that any discussion of potential successful investments is ultimately extraneous and unimportant to the charges being considered by the jury.
The US government claims that even though it intends to present evidence of SBF’s alleged misappropriation of customer deposits, which led to significant losses on FTX’s balance sheet, it does not intend to do the same once the bankruptcy process for FTX is over.
Anthropic has been in the news recently as it attempts to obtain further funding from investors. Anthropic has a deal with Amazon worth up to $4 billion and is negotiating to raise an additional $2 billion. The company is also pursuing companies like Google, which may result in a valuation of $20 to $30 billion.
