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Former FTX CEO’s Defense Team Raises Alarm Over Missing Evidence in Fraud Trial

Former FTX CEO Sam Bankman-Fried’s defense team has raised concerns over the prosecution’s failure to meet discovery deadlines for crucial evidence related to fraud charges.

In a letter addressed to United States District Judge Lewis A. Kaplan on June 5, Bankman-Fried’s lawyers stated that the government had not provided all the contents of five electronic devices due for discovery by the end of March. These devices include a laptop and iPhone belonging to former Alameda Research CEO Caroline Ellison and a laptop belonging to FTX co-founder Gary Wang.

The defense team expressed apprehension about the impact of delayed and voluminous discovery on their trial preparation as the trial date approaches in less than four months. Bankman-Fried is scheduled to appear in court on October 2, facing multiple fraud charges, allegations of illegal political donations, and bribery accusations involving the Chinese government.

While Bankman-Fried is not seeking an adjournment of the trial date, the defense may file additional motions if the newly produced discovery provides grounds for such actions.

The defense team also highlighted the government’s failure to produce information related to FTX debtors, further complicating the defense’s ability to prepare for trial adequately. The late productions of discovery have accumulated substantially, comprising over 3.6 million documents and exceeding 10 million pages.

The defense received the first four productions, consisting of approximately 1.1 million documents, while the fifth and most recent production, received on May 25, contained just under 2.5 million documents, more than tripling the existing discovery. The late production of such extensive documentation poses challenges for the defense.

Meanwhile, in another development related to FTX, reports indicate that Perella Weinberg, the investment banking firm assisting the bankrupt exchange, is exploring the possibility of selling hundreds of millions of dollars worth of shares in AI startup Anthropic to potential investors. FTX’s balance sheets at its bankruptcy in November 2022 revealed holdings of $500 million worth of Anthropic stock, which is now estimated to be significantly more valuable due to the ongoing AI boom.

Anthropic, a prominent player in the artificial intelligence sector, recently concluded its Series C funding round, raising $450 million with a reported valuation of $4.6 billion on May 23. Given the surge of interest in the AI industry, FTX bankers overseeing the exchange’s recovery are considering cashing out their shares in Anthropic, potentially generating substantial returns.

The potential sale of FTX’s Anthropic stock represents an opportunity for the investment banking firm to generate significant liquidity and aid in resolving FTX’s financial predicament.

As Bankman-Fried’s trial draws nearer, the defense’s concerns regarding delayed evidence production and the potential impact on their trial preparation remain at the forefront. At the same time, FTX’s involvement in the AI sector indicates a potential avenue for resolving its financial challenges. The coming months will likely shed further light on these developments as the legal proceedings and FTX’s recovery efforts unfold.

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