FTX Founder Sam Bankman-Fried Intends to Blame Fenwick & West Lawyers in His Defense — Transcript

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1. 0:00the state of crypto is presented by Tron
2. 0:02connecting the world to the power of
3. 0:04cryptocurrency
4. 0:10all right some breaking news coming in
5. 0:12new developments in the FDX founder Sam
6. 0:14bankman Freed's defense strategy joining
7. 0:17us now to discuss this is coindesk
8. 0:18global policy and regulation managing
9. 0:20editor Nick day who is also editor of
10. 0:22coinda's state of crypto newsletter good
11. 0:24morning Nick
12. 0:26good morning
13. 0:28all right so SPF his loyal somebody has
14. 0:31sent a letter what does it say
15. 0:34yeah so this is from this morning the
16. 0:37FTX uh sorry the salmon country defense
17. 0:39team has filed a letter saying that uh
18. 0:41you know as part of their defense they
19. 0:43plan to introduce an advice of council
20. 0:46argument basically saying that Sam
21. 0:48mcmanfried believed he was acting in
22. 0:50quote good faith uh when he was doing
23. 0:53various things with FDX including
24. 0:55setting signal messages and other
25. 0:56systems to Auto delete loaning funds to
26. 0:59Alameda and FTX Executives and setting
27. 1:02up North American entities like North
28. 1:03Dimension uh basically saying that he
29. 1:06was doing all of this after on the
30. 1:08belief that lawyers from boat Fenwick
31. 1:11and West and external law firm as well
32. 1:13as in-house Council had reviewed these
33. 1:15decisions and uh you know basically
34. 1:18implying that they had signed off on it
35. 1:19saying that you know he was not doing it
36. 1:21out of his own volition he was doing it
37. 1:23you know with the understanding that his
38. 1:26lawyers told him it was fine
39. 1:28sorry Nick what's not clear so far and
40. 1:31perhaps you can add some clarity on this
41. 1:33is has he named The Firm has he named
42. 1:35Team Council inside Council or outside
43. 1:38console yeah so the the law firm is
44. 1:41Fenwick and West um this is the same Law
45. 1:43Firm that the defense team previously
46. 1:45tried to get more information from but
47. 1:47was blocked by uh the judge overseeing
48. 1:49the case as well as you know prosecutors
49. 1:52had objected to it
50. 1:53um so not a new name we've seen their
51. 1:55name pop up tied to FTX before uh it
52. 1:58does seem to yeah I think one way of
53. 2:01kind of reading this is you can say that
54. 2:03bankman Freed's defense team intends to
55. 2:04blame Fenwick and West for at least some
56. 2:06of the decisions or some of the process
57. 2:08that led to this decisions that he's now
58. 2:11on trial for he's also naming in-house
59. 2:13counsel like Dan Friedberg and Ryan
60. 2:15Miller as well as a couple others
61. 2:17um you know we have not had a chance to
62. 2:18reach out to most of these individuals
63. 2:20yet we did send a you know uh request
64. 2:23for helmet to Federal good West that
65. 2:25they have not responded yet although I
66. 2:26believe they're on the west coast so
67. 2:28it's very possible to not even awake yet
68. 2:31um
69. 2:32but yeah this is a
70. 2:34it's in kind of we've seen this kind of
71. 2:36implied before but now we have firm
72. 2:39confirmation that that is one of the
73. 2:40strategies to defense team intends to
74. 2:42pursue
75. 2:43Nick you were in the courtroom yesterday
76. 2:45you were also there when Sam begman
77. 2:47freed had his bail revoked at that time
78. 2:49you described his parents as being very
79. 2:51emotional being a very charged uh
80. 2:53courtroom what was it like yesterday
81. 2:55when you were there paint a picture for
82. 2:57us
83. 2:59yeah so uh yesterday was uh you know
84. 3:01relatively I'd say a very low-key Affair
85. 3:04um you didn't have as many people in the
86. 3:06courtroom as you normally do normally
87. 3:08the courtroom is packed you only had a
88. 3:10handful of people yesterday uh Sam
89. 3:12McAfee's mother was present his father
90. 3:14was not
91. 3:15um bank would feed himself uh you know
92. 3:18he was escorted in a little bit after uh
93. 3:22you know 9 A.M when everyone was already
94. 3:24seated uh wearing a you know appeared to
95. 3:27be a prison you know uniform prison not
96. 3:30a jumpsuit exactly but uh you know
97. 3:32Joseph Beach clothes instead of his
98. 3:34usual suit uh it looked like his legs
99. 3:37were still Shackled you know the chain
100. 3:39that uh lets them walk but prevents them
101. 3:41from running uh he appeared to you know
102. 3:44be that uh or have those on his legs
103. 3:48um and yeah he quickly smiled at his
104. 3:50mother walked to the bench and then
105. 3:52didn't look back to the rest of the to
106. 3:54hearing itself
107. 3:57all right uh just Switching gears uh
108. 4:01Nate chastion the former head of product
109. 4:03at open C he was sentenced to three
110. 4:06months of prison time uh this is an
111. 4:09insider trading case could you tell us
112. 4:10what happened there
113. 4:12yeah so nature stay in the former openc
114. 4:15Executives who was arrested last year on
115. 4:17allegations of uh basically buying up
116. 4:19nfts and flipping them knowing that they
117. 4:22would be uh featured on opensees
118. 4:25homepage uh so he was convicted of uh
119. 4:28you know a couple charges tied to you
120. 4:31know decents that are trading
121. 4:32allegations and uh yesterday he was
122. 4:34sentenced to three months in jail three
123. 4:35months home confinement three years of
124. 4:37supervised released a I believe it was a
125. 4:39fifty thousand dollar fine and he has a
126. 4:41450 nfts that uh he got you know during
127. 4:45this uh period
128. 4:47um so relatively speaking I think it
129. 4:49does not seem to be a very you know
130. 4:51severe penalty for what he's been
131. 4:53accused of uh you know he'll be poem uh
132. 4:57yes it's under uh surrender on November
133. 4:592nd he'll be home you know early in the
134. 5:01new year
135. 5:03and that's a three-month sentence right
136. 5:05Nick
137. 5:06right three months uh in prison followed
138. 5:08by another three months of Home
139. 5:09confinement
140. 5:14thank you very much for joining us this
141. 5:16morning
142. 5:18that was coindesk Global policy and
143. 5:21regulation managing editor Nick day
144. 5:23don't forget to sign up for the state of
145. 5:26crypto newsletter on coindesk.com Nick
146. 5:29is the fabulous editor behind that