Sam Bankman-Fried’s defense team is gearing up to question Caroline Ellison, the former CEO of Alameda Research, regarding FTX’s investment in AnthropicAI. The line of questioning will also revolve around the extent to which Ellison relied on legal counsel during her tenure as the head of Alameda Research, a crypto hedge fund closely linked to Bankman-Fried’s now-bankrupt FTX crypto exchange.
Ellison, a key figure in the criminal fraud case against Bankman-Fried and his former romantic partner, took the witness stand on Tuesday. During her testimony, she claimed that her advice on FTX’s investment portfolio had been disregarded. In response, Bankman-Fried’s legal team is seeking permission from the court to explore these allegations further.
Exploring “Advice-of-Counsel” and Corporate Policies
Following Ellison’s initial testimony, SBF’s legal team filed two critical motions. The first motion focuses on the topic of “advice-of-counsel,” a subject previously highlighted by Judge Lewis Kaplan as requiring advance notification if the defense wished to address it. The defense aims to delve into Ellison’s understanding of the role played by lawyers associated with FTX and Alameda in shaping corporate policies, including the activation of auto-deletion features on the messaging platform Signal.
The Department of Justice (DOJ) had urged the court to prevent SBF’s defense from discussing the current valuation of FTX’s investments, deeming it irrelevant to the core question of whether Bankman-Fried had misused FTX customer funds for personal gain.
The Significance of Anthropic AI’s Recent Fundraising Initiatives
Recent fundraising activities by Anthropic AI, an artificial intelligence firm, have raised hopes among FTX creditors that they may receive substantial returns if the insolvent exchange sells its stake in the AI company. SBF’s legal team argues in their second motion that this news is crucial context for assessing FTX’s expected value analysis. They aim to address broader questions regarding FTX’s investment portfolio in light of this development.
Following the court session, Judge Lewis Kaplan discussed the appropriateness of raising these issues during the trial with the attorneys. It was also disclosed by a U.S. attorney that Ellison holds a personal stake in Anthropic AI. The prosecutor expressed reservations about the permissibility of this line of questioning but expressed willingness to explore it if deemed relevant by the court.
