Sam Bankman-Fried’s $500M stake in AI startup ‘irrelevant’, prosecutors say
A $500 million investment in AI startup Anthropic that Sam Bankman-Fried made in 2022 may be introduced as evidence by his lawyers in court to show that FTX creditors can be made whole — but prosecutors have asked that it be thrown out.
Prosecutors filed the request on Sunday to Judge Kaplan, who is overseeing Bankman-Fried’s ongoing criminal court case. They said that the evidence will likely be used to argue that FTX customers will be fully repaid — but the court has already ruled that Bankman-Fried’s intention to repay creditors is “immaterial” to the case.
“The Indictment alleges that the defendant committed wire fraud by misappropriating FTX customer deposits to make investments and other expenditures,” the filing read. “It is immaterial whether some of those investments might ultimately have been profitable.”
Therefore, prosecutors argue, the introduction of that evidence would be “wholly irrelevant, and present a substantial danger of unfair prejudice.”
- The $500 million investment in Anthropic was made by Bankman-Fried in April 2022.
- According to prosecutors, customer deposits were used to make the investment.
- Now, Anthropic announced a funding round that includes bigwig investors like Amazon and Google.
Anthropic’s latest funding round, which anticipates between $20 billion to $30 billion, has raised speculation that Bankman-Fried’s $500 million stake will increase in value — and therefore increase the likelihood of FTX customers getting funds back.
If Bankman-Fried’s defense were able to introduce this evidence, prosecutors worry that a “mini trial” would be needed to sort out how likely it is for full repayments to be made with this investment.
“Even if there were any arguable probative value to this evidence, it would be substantially outweighed by the risk that such evidence would cause unfair prejudice, confuse the issues, mislead the jury, cause undue delay, and waste time,” prosecutors wrote in the filing.
Read more: Sam Bankman-Fried’s parents show signs of stress as defense flounders
If Judge Kaplan grants the prosecutors’ request to throw out the Anthropic stake as evidence, it would be an added blow to Bankman-Fried’s defense. As reported by Protos last week, his lawyers appear to be floundering — and his parents were seen displaying signs of stress in court.
Bankman-Fried’s trial will recommence tomorrow, where former Alameda Research chief Caroline Ellison will testify against him. Last week, FTX co-founder Gary Wang testified that Bankman-Fried instructed him to grant special privileges to Alameda that allowed it to run a negative balance as early as 2019.
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