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Do Bankman-Fried Jurors Need Crypto Knowledge to Decide Case?

SBF

Jurors in FTX founder Sam Bankman-Fried’s trial may not be familiar with cryptocurrencies.

And as The Wall Street Journal (WSJ) reported Tuesday (Oct. 3), that lack of knowledge might be something both the prosecution and the defense use to their advantage.

Bankman-Fried, 31, is charged with defrauding customers and investors in the multi-billion dollar collapse of the FTX crypto exchange last year. He could face what amounts to a life sentence if convicted.

It’s a case that involves complicated transactions, but will attorneys have to educate jurors about the world of crypto to make their case? Legal experts tell the WSJ that might not matter, at least for federal prosecutors.

“A big part of what the government will try to do is make this simple,” said attorney Rebecca Mermelstein, a former federal prosecutor who is now a partner at the firm O’Melveny & Myers. “Confusion is the friend of the defense lawyer, because if the jury can’t understand what was happening, they can’t convict.”

The report noted recent comments by a Justice Department lawyer supervising the prosecution who argued that a crypto case isn’t much different from a traditional fraud trial.

“The real question is, was the defendant making misrepresentations, was the defendant trying to deceive people?” said Scott Hartman, a prosector with the U.S. attorney’s office for the Southern District of New York.

Meanwhile, Bankman-Fried’s lawyers had indicated they planned to argue the complexities of crypto and the lack of clear regulations in the sector, the report said. However, they’ve been barred from calling most of their proposed expert witnesses on the crypto industry. 

“Typically, the defense has the much more complex task of having to explain why things that look wrong aren’t really wrong or things that may look like intentional decisions really just reflect poor oversight,” said Ellen Brickman, a director at trial-consulting firm DOAR.

She said that if intent is at the core of Bankman-Fried’s case, he might be able to testify that his actions were management mistakes and not crimes.

As PYMNTS wrote Monday (Oct. 2), observers believe Bankman-Fried has a tough road ahead, with friends and former colleagues pleading guilty to related charges and scheduled to testify against him.

“The court’s trial calendar shows that Bankman-Fried’s juried reckoning will stretch at least until Nov. 9, nearly a year to-the-date from when (on Nov. 11) FTX entered into bankruptcy,” that report said.