SBF testifying, bitcoin rises amid spot ETF speculation and Walmart’s web3 accelerator surfaces

October 26, 2023 ndowd

Welcome back to Chain Reaction.

To get a roundup of TechCrunch’s biggest and most important crypto stories delivered to your inbox every Thursday at 12 p.m. PT, subscribe here.

It’s week four of the Sam Bankman-Fried trial…and he’s taking the stand today at 2 p.m. So keep an eye out for additional coverage.

This marks the second time Bankman-Fried has spoken out publicly in the courtroom after saying “yes,” on the first day in response to Judge Lewis Kaplan asking if he understood he had the right to testify if he wanted to.

This is the first day the defense presented their arguments after multiple weeks of prosecutors making their case with rising sheafs of evidence.

The prosecutors rested their case around 10 a.m. on Thursday. Mark Cohen, Bankman-Fried’s lead lawyer, requested a motion for acquittal on all seven counts against his client, calling the government’s case on the charges “insufficient” with “materiality not shown.” Prosecutors opposed the motion and Judge Kaplan declined it.

The trial was on recess from October 20 until today. But Wednesday morning, there was a virtual hearing between Judge Lewis Kaplan, the prosecutors and defense to frame the rest of the case.

During the call, Cohen said that the defense has three potential witnesses and added “our client will be testifying.” Before the defense makes their case, the prosecutors plan on bringing out one more witness, FBI agent Marc Troiano, to “summarize certain documents” focused on FTX and Alameda, Assistant United States Attorney Thane Rehn said.

The defense also filed a letter to Judge Kaplan on Wednesday requesting permission to ask Bankman-Fried’s “good faith” about certain elements of FTX and Alameda. Some of the events regarded internal and external legal counsel implementing data retention policies, like auto-deletion policies for Slack and Signal, as well as loans made from FTX and Alameda to executives, drafts of terms and services and other areas.

“Bankman-Fried’s understanding that auto-deletion policies were instituted under the guidance of lawyers would be directly relevant to rebut the inference that these policies were instituted for improper purposes,” the defense letter wrote.

Cohen said on the virtual call he expects Bankman-Fried’s testimony to be the same length as that of his former colleagues, who pleaded guilty: FTX co-founder and CTO Gary Wang, Alameda CEO Caroline Ellison and FTX head of engineering Nishad Singh. He also said that it will take a “good part of Thursday, maybe all of Thursday,” with potential for Friday cross-examination.

Even though the trial was on pause, details were still transpiring, and we were still putting out more content. Details below.

SBF trial

This week in web3

If you’re getting SBF trial fatigue, here are some articles on what else is happening in the wild world of web3.

The latest pod

For this week’s episode, Jacquelyn interviewed Josh Naftalis, partner at law firm Pallas Partners.

He’s a longtime attorney who represents companies, boards and executives in cases for white-collar criminal defense, regulatory enforcement matters, internal investigations, crisis management and more.

Prior to Pallas Partners, Josh was a federal prosecutor and served over a decade as assistant U.S. attorney in the U.S. Attorney’s Office for the Southern District of New York. While at the SDNY he led a number of government white-collar prosecutions and trials, and was a senior member of SDNY’s Securities and Commodities Fraud Task Force. Josh handled situations ranging from cryptocurrency to insider trading and market manipulation to corporate and accounting fraud. His work also involved coordination with other agencies like the SEC, CFTC and FBI.

While at the SDNY, Josh secured convictions in every federal criminal trial that he led as an assistant U.S. attorney. So we saw him as the perfect person to dive into the eye-grabbing trial of Sam Bankman-Fried, who is fighting seven charges related to money laundering and fraud. SBF’s trial is also taking place at SDNY where Josh worked.

We talked about all the nitty-gritty details of SBF’s trial: the prosecution’s strategy, the defense’s strategy, how this case compares to ones that Josh previously led and how likely it is that jurors will reach a guilty verdict.

We also talked about:

How many years SBF could face
Importance of jurors
Best witness testimonies so far
Sentencing for other FTX execs
Why he thinks SBF will testify

Subscribe to Chain Reaction on Apple Podcasts, Spotify or your favorite pod platform to keep up with the latest episodes, and please leave us a review if you like what you hear!

Follow the money

Avalanche-focused gaming studio Neon Machine closed a $20 million Series A round
Singapore-based crypto payments startup Triple A raised $10 million in a Series A round
Ethereum onchain privacy startup Nocturne raised $6 million in a seed round
Binance led $12 million funding round for InfinityStakeChain
Web3 healthcare platform Rymedi raised $9 million in a Series A

This list was compiled with information from Messari as well as TechCrunch’s own reporting.