The heart of the DOJ’s argument lies in the assertion that evidence regarding the current value of Bankman-Fried’s investments, particularly his stake in Anthropic, is irrelevant to the charges against him.
The legal saga surrounding Sam Bankman-Fried (SBF), the founder of the crypto exchange FTX, continues to unfold as the US Department of Justice (DOJ) seeksto exclude specific evidence from his defense.
The request aims to preclude the defendant from introducing evidence or argument related to the current value of certain investments made by Bankman-Fried, particularly his investment in Anthropic, an Artificial Intelligence startup.
Background of the DOJ Request on Anthropic
Sam Bankman-Fried is facing charges related to wire fraud, specifically the misappropriation of funds from FTX customers to finance various investments, including the aforementioned investment in Anthropic. The DOJ alleges that these funds were stolen from FTX customers, forming the basis of their case against the defendant.
Anthropic, the AI startup in question, gained public attention by announcingplans to raise additional capital from investors like Amazon.com Inc(NASDAQ: AMZN) and Google. Reports suggest that this new investment could potentially value the company between $20 billion and $30 billion, which may significantly impact the value of Bankman-Fried’s initial investment.
Meanwhile, FTX took a stake in Anthropic that was worth $500 million when it filed for bankruptcy nearly a year ago. However, the bankruptcy trustee for FTX has not yet soldFTX’s stake in Anthropic.
This delay in selling the stake has now become a matter of interest and speculation, especially among FTX creditors who are eagerly anticipating any potential recovery from the bankruptcy proceedings.
The DOJ’s Argument
The heart of the DOJ’s argument lies in the assertion that evidence regarding the current value of Bankman-Fried’s investments, particularly his stake in Anthropic, is irrelevant to the charges against him. The government claims that even if the value of these investments has increased significantly, it does not mitigate the alleged fraudulent activities undertaken by Bankman-Fried during the course of his tenure at FTX.
The government cites legal precedents, such as United States v. Sindona and United States v. Males, to emphasize that the immediate intent to misapply and defraud is the primary focus in such cases. The prosecutors, therefore, highlighted that belief in future profitability or intent to repay misappropriated funds is irrelevant.
Furthermore, the DOJ contends that evidence of the current value of Anthropic shares, or any other investments, could mislead the jury and create undue confusion. Valuations in venture capital investments are often speculative and subject to change, as evidenced by the example of FTX itself.
This could potentially lead to a lengthy and unnecessary mini-trial regarding the value of assets available through bankruptcy proceedings, which is unrelated to the central issues the jury needs to decide.
Lastly, the DOJ argues that introducing such evidence could encourage a verdict based on an improper basis. While the government acknowledges that Bankman-Fried’s misappropriation led to FTX’s bankruptcy, it has not offered evidence of how much money victims will ultimately lose.
Therefore, introducing evidence of the current value of investments would serve no purpose other than to prejudice the proceedings.
nextBlockchain News, Business News, Cryptocurrency News, Investors News, News
Author Benjamin Godfrey
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
Share:
Newsletter
Your e-mail *
subscribe
Thank you!
You have successfully joined our subscriber list.
The exchange has already received the funds back. The hacker received a 5% white-hat incentive, or a remuneration of 250 ETH for restoring the funds, as well as a job offer to work as a white-hat security adviser.
Huobi Global‘s HTX crypto exchange has confirmed a refund of the funds stolen in September. The total sum of the refund has amounted to $8.2 million worth 4,999 Ethereum (ETH). Seems that the company has negotiated with the hacker, and as a result of the talks, the hacker made “the right choice” agreeing to give back the funds stolen. Notably, HTX has offered a 5% white-hat incentive, or a remuneration of 250 ETH to the hacker for restoring the funds.
HTX advisor Justin Suntook to the X platform to share the news.
We have confirmed that the hacker has fully returned all funds, as promised, and we have also paid the hack a white hat bonus of 250 ETH. The hacker made the right choice. We would like to express our gratitude to everyone in the industry for their help!
— H.E. Justin Sun 孙宇晨 (@justinsuntron) October 7, 2023
Apart from the Whitehat incentive, the hacker was also offered a job opportunity as a white-hat security adviser in exchange for a prompt and voluntary return.
Justin Sun stated:
“Strengthening blockchain security and protecting user assets is never an easy task, and we have been working tirelessly! Providing full security for user assets is always our goal to strive for! We are thankful for the continued support of our users and community!”
On September 24, a crypto security organization CyversAlerts reported the cyberhack, referring to the vulnerability in one of HTX’s hot wallets as a reason behind it. According to CyversAlerts, the funds were sent to an address that had no previous history. The attacker was promptly identified, and an attractive proposal was sent to them by a separate wallet belonging to Huobi. In particular, the exchange offered to allow the hacker to keep 5% of the stolen funds as a “white-hat bonus” if they chose to return the remaining 95% and not reveal the attacker’s identity. Notably, the deadline for the offer’s validity was until October 2, for the hacker to return the funds. The message was written in Chinese.
The exchange has already received the funds back.
Surge of Hack Attacks
The rapid development of modern technologies not only offers multiple benefits and simplifies our lives but also opens opportunities for hackers to illegally get access to someone’s data. Back in 2020, cyber-attacks were rated the fifth top-rated risk, becoming the new norm across public and private sectors. In 2023, this trend will continue, and the number of attacks will grow. So far, there have been 838 cyber attacks recorded this year, and 71 of them took place in September alone.
The biggest hack attack reported last month led to a loss of $200 million in crypto assets of the decentralized finance (DeFi) project Mixin Network. As we have reported, Mixin had $94.48 million worth of Ether (ETH), $23.55 million in Dai (DAI), and $23.3 million in Bitcoin (BTC) during the hack. The combined value of this portfolio thus reached $141.32 million. Similar to Huobi, Mixin Network offered a $20 million bug bounty if the hackers returned the funds, however, the chances of getting the refund are low.
Vitalik Buterin, Ethereum’s co-founder, also suffereda data breach. Malicious actors gained control of his X (formerly Twitter) account and used it to publish a post claiming to celebrate the arrival of “Proto-Danksharding coming to Ethereum”. They also posted a malicious link that falsely promoted free non-fungible tokens(NFTs).
nextBlockchain News, Cryptocurrency News, Cybersecurity News, News, Technology News
Author Darya Rudz
Darya is a crypto enthusiast who strongly believes in the future of blockchain. Being a hospitality professional, she is interested in finding the ways blockchain can change different industries and bring our life to a different level.
Share:
Newsletter
Your e-mail *
subscribe
Thank you!
You have successfully joined our subscriber list.
