Home
News
- 1 The trials against Sam Bankman-Fried are going on in the Manhattan court to find out his role in the FTX implosion.
- 2 With the recent testimony of former general counsel Can Sun, it was revealed that the executives were aware of an $8 Billion hole in the books.
The testimonies of people related to the FTX and Sam Bankman-Fried case continue amid the trials against the latter in the Manhattan court. Until now, many prominent names in the company and its sibling firm Alameda Research showed up for the testimony. For the latest installment, came the former general counsel at FTX, Can Sun, whose testimony might have left SBF’s defense in discomfort.
In his testimony on Thursday, October 19, Can Sun stated he was completely unaware of the situation with the debts and irresponsible handling of customers’ assets in both companies. He added that he had never suggested borrowing customer funds.
These claims from the former counsel would weaken the arguments of Bankman-Fried’s defense. The defense was repeatedly seen to make statements that the former FTX CEO was following the legal advice he was receiving before the collapse took place.
Sun’s testimony sheds light on his perspective during his association with FTX. He underscored that he joined FTX and operated under the belief that all customer assets held by the exchange were securely safeguarded, segregated, and shielded from any unauthorized actions. Importantly, he stated that he never offered advice or consented to the borrowing of customer funds or their removal from the platform.
Sun further emphasized his active participation in both public and private meetings, where Sam Bankman-Fried (SBF) and other company executives reassured customers about the security measures in place, specifically highlighting that FTX did not possess any rights to customer assets.
When found out about the hold of $8 Billion in Alameda Research’s book on November 7, 2022, according to Sun, it was shocking for him. Sam Bankman-Fried asked him to come up with some legal solution for it. But it was not possible and Sun resigned the very next day.
General Counsel Drafted Policies for FTX
A Yale Law School graduate, Can Sun joined FTX in August 2021 and stayed there until November 2022. He was under the supervision of Sam Bankman-Fried and Dan Friedberg, who was the first attorney in the company. He was under a non-prosecution agreement with the United States Department of Justice and the testimony came in the wake of it.
Sun played a proactive role in drafting a revised set of terms of service for the platform, which officially took effect in May 2022. These updated terms were more detailed compared to their predecessors, particularly concerning the use of customer funds.
The attorney viewed these enhanced terms as a clarification of what he believed had always been the policy, reaffirming that customers had complete ownership of their assets, whether in traditional currency or cryptocurrency.
More importantly, these updated terms had a pivotal role in the licensing process for FTX Digital Markets in the Bahamas. Following this licensing, FTX Digital Markets assumed operations for nearly all customers who utilized FTX.com. This underscores the profound influence of these terms in redefining the operational framework of the platform, reinforcing the principle of customer asset ownership.
These revelations from the former general counsel were enough to leave the defense of Sam Bankman-Fried uncomfortable. The counter will be awaiting as the defense is likely to begin on October 26, 2023.
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
