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Can Sun , former FTX general counselor , took the point of view on Thursday to testify on behalf of the prosecution ’s case against Sam Bankman - Fried . Sun has a non - prosecution correspondence in exchange for his cooperation .
The Yale law school grad joined FTX at the last of August 2021 and stayed until early November 2022 shortly after the crypto exchange collapsed . Before going in - business firm at the exchange , Sun work for Fenwick & West , where he also apprise FTX as outside counsel .
Once in - house , Sun ’s function consisted of various legal functions , like obtaining regulatory licenses for the interchange and dealing with how FTX cover customer asset — or so he thought , he testified . Bankman - Fried had allegedly told him that FTX client sedimentation were unequivocally “ safeguard , segregated and protected . ”
When asked by prosecuting attorney whether he ever approved FTX ’s use of goods and services of customer assets , Sun replied , “ no , dead not ” and said he was enjoin the client funds were held in a disjoined account that did n’t admit FTX ’s own proprietary investment trust , and he was not mindful Alameda was getting FTX customer depositary .
“ In all my conversations with Sam , it was always said that customer plus were “ safeguard , segregate and protect , ” Sun tell .
During Sun ’s testimonial , prosecutors spotlight the terms of service , which did not let the interchange to extend to customer cash in hand . ( Sun testified he had worked on the TOS but that it was largely finished by the time he joined . ) One provision state that “ none of the digital plus in your accounts are the attribute of , or shall or may be loaned to FTX trading ” ; there was another that said customers “ moderate the digital asset hold in your account . ”
Bankman - Fried wore a gray lawsuit that bunched up on his articulatio humeri and neck as he sat . He spend most of the day type on his laptop or excrete notes to his legal team . His parents model in the same bench they ’ve occupied since the showtime of trial .
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When the terms of service were bestow up in evidence , Bankman - Fried ’s female parent , Barbara Fried , looked up the ceiling , took bank note , look at the monitor and then back at her son on gyration . She also put her head in her hand and pressed her thumb to her temple , rubbed her heart a few clip , and looked back at Bankman - Fried during the criminal prosecution ’s testimony .
Sun get wind in August or September 2022 that Alameda was not exempt from auto liquidation , which allow the trading firm to go “ infinitely negative , ” on FTX ’s weapons platform . “ I was shocked … [ it ] went against everything we told regulator and drug user . ” He added that he was told that Alameda ’s liquidation exemption had never been triggered — which other viewer like FTX co - father Gary Wang have testified to not be true . irrespective , Sun asked for it to be dispatch , and he was evidence that Bankman - Fried and Nishad Singh , head of FTX applied science , said “ no . ”
rather , Sun testify that he got the related to party to agree that it would be made light to users and regulators that the Alameda ’s perquisite would be changed to delayed liquid mechanisms . It was approved by FTX ’s legal squad , but it never made it through the business sector side at the time of FTX ’s collapse in November , Sun say .
During crossing - examination , Sun said he think about reconcile over the spot , but he did n’t sleep with at the time that it was the same chemical mechanism Alameda used to take FTX pecuniary resource .
Documenting loans
During Sun ’s time at FTX , he was also creditworthy for documenting loans for FTX . There were over 30 loanword he documented where Alameda loan money to Bankman - Fried , Wang and Singh . He testified that he think Alameda would make personal loan to the three individuals and shoot funds into FTX for majuscule . “ I had no idea customer investment company were being used , ” Sun said .
Sun created a spreadsheet that kept track of the more than 30 loans made to Bankman - Fried , Wang and Singh ; the loans total over $ 2.17 billion . “ If they were not on my spreadsheet , I was not mindful of them , ” Sun said .
Sun also received a personal loanword of $ 2.3 million as part of a “ direction motivator program ” to get him to move to the Bahamas from Hong Kong , soon after he joined the company . He also got a bonus of $ 3.5 million in January 2022 , about five months after connect FTX .
November talks with Apollo
On November 7 , 2022 , four days beforeFTX file away for bankruptcy , Sun joined a call with Apollo Global Management , Ramnik Arora of FTX Ventures and others in an endeavour to raise capital from the firm and “ assist empty the liquidness problem that FTX had for customer withdrawal . ”
After an initial call , Apollo asked for FTX ’s fiscal statement and Sun and related party divvy up them . “ I was shocked because it showed FTX was short $ 7 billion . ”
Sun say he asked question about how it was calculated — he tell the spreadsheet was messy — and he “ did not get square responses , ” but alternatively just “ obscure answers ” from Singh and Bankman - Fried . Looking back at that here and now , Sun recalls Bankman - Fried was there “ typing away ” on his laptop computer , scarcely verbalize . While Singh was “ wan and hoar ” and bet like his “ soul [ was ] plucked off from him , ” Sun said .
After sharing the numbers with Apollo , Bankman - Fried recount Sun that the firm expect for sound justification for missing funds and allegedly asked Sun to come up with one . Sun proposed three “ theoretical contestation , ” but “ there were no effectual justification for funds missing . ”
Sun testified he went on a walk that dark with Bankman - Fried around an flat at the luxury resort , The Albany , where many FTX employee lived . During that conversation , Sun told Bankman - Fried that none of the theoretic arguments would justify why the FTX investment trust were neglect ; Sun testified that SBF answer “ yup , yup ” and “ pay off it . ”
During a conversation with Singh later that night , Sun said the former engineer break to him that Alameda ’s “ no elimination ” method was how the business firm withdrew the billion of dollars in customer deposits .
Sun step down from the party the next Clarence Shepard Day Jr. .
