By Luke Cohen
NEW YORK (Reuters) – A U.S. judge on Thursday limited the ability of the founder of the FTX cryptocurrency exchange to call expert witnesses to testify in the criminal fraud trial of Sam Bankman-Fried.
Bankman-Fried sought to call seven experts on topics such as the cryptocurrency market and English contracts to convince jurors that FTX stole billions of dollars in client funds to plug losses at the Alameda Research hedge fund.
But U.S. District Judge Lewis Kaplan said in a written order that three subpoenaed witnesses could not take the stand because their testimony would be irrelevant or could confuse the jury.
In addition, Banman-Fried may want to call the other four experts, but only to refute the prosecution’s witnesses.
Among the witnesses Kaplan rejected was Peter Vinella, a consultant who intended to testify about “FTX’s use of practices widely accepted in the financial services industry.” Kaplan found the testimony irrelevant.
Bankman-Fried cannot call English attorney Lawrence Aka to testify that FTX’s terms of service are governed by English law because only a judge can tell a jury what the law is, Kaplan said.
Court papers may argue that Bankman-Fried’s terms of service did not prevent it from using customers’ money to invest — just as banks use deposits to back loans — and that the practice was common in the cryptocurrency industry.
Banman-Fried, a 31-year-old former billionaire, has pleaded not guilty. In the year He admitted to inadequate risk management at FTX before the November 2022 crash, but denied stealing money.
In US criminal trials, it is common for prosecutors and defendants to call on experts to help them understand complex cases.
Prosecutors have said they plan to call three convicted former FTX and Alameda executives to testify at Bankman Fried’s trial, which could last up to six weeks.
(Reporting by Luke Cohen in New York; Editing by Daniel Wallis)