Sam Bankman-Fried’s defense team is set to question Caroline Ellison, the former CEO of Alameda Research, about FTX’s investment in AnthropicAI.
The series of questions would also focus on the extent to which Ellison relied on legal counsel to make crucial decisions during her tenure as head of Alameda Research, a crypto hedge fund closely tied to crypto exchange FTX of SBF, now bankrupt.
Ellison, a central figure in the criminal fraud case against SBF and his former romantic partner, took the witness stand Tuesday.
During her testimony, she claimed that her advice regarding FTX’s investment portfolio was ignored.
In response, SBF legal team seeks court authorization to explore these allegations further.
Defense seeks to establish SBF followed Council advice
Two critical motions were filed by SBF’s legal team following Ellison’s initial testimony.
The first motion seeks to address the issue of “advice of counsel,” a topic that Judge Lewis Kaplan previously highlighted for advance notice should the defense wish to explore.
The defense is keen to probe Ellison’s understanding of the role lawyers associated with FTX and Alameda played in formulating corporate policies, including enabling auto-delete features on the Signal messaging platform.
The Department of Justice (DOJ) previously asked the court to prevent SBF’s defense from addressing the current valuation of FTX’s investments, arguing that it had no bearing on the central question of whether Bankman-Fried had misappropriated FTX client funds for personal use.
SBF lawyers ask to discuss anthropogenic investment
As previously reported, recent fundraising initiatives announced by artificial intelligence company Anthropic AI, raises hopes that FTX creditors could experience more substantial returns if the insolvent exchange liquidates its stake in the AI company.
In their second movementSBF’s legal team says the Anthropic AI news provides “crucial context” for evaluating FTX’s expected value analysis.
They aim to ask broader questions regarding FTX’s investment portfolio in light of this development.
At the end of the hearing, Judge Lewis Kaplan engaged in a dialogue with the attorneys regarding the appropriateness of raising these issues during the trial.
Ellison also has a personal stake in Anthropic AI, a fact revealed by a U.S. attorney after the jury left the courtroom.
The prosecutor, Danielle Sassoon, expressed reservations about the legality of this line of questioning, but indicated a willingness to explore it if the court deemed it relevant.