On the 12th day of the trial of Sam Bankman-Fried, a surprising revelation by former lawyer Can Sun sent shockwaves and raised a series of new issues regarding the cryptocurrency exchange’s alleged misuse of customer funds.
Can Sun, previously holding the position of legal advisor at FTX, announced his resignation upon discovering that the exchange had spent customer funds for purposes deemed inappropriate. Sun, invited to testify by the U.S. Department of Justice prosecutors, flew from Japan to the U.S. to appear in court.
Prosecutors presented evidence from a video interview with Sam Bankman-Fried on Good Morning America, where the former FTX CEO alleged that the financial shortfall originated from the margin lending mechanism on the platform. Contrarily, Can Sun denied having any evidence supporting Bankman-Fried’s argument.
The latest information from the trial revealed that Can Sun discovered Alameda Research held an unsettled trading account on FTX and maintained a negative balance since August 2022. He expressed concerns to higher management but received no resolution.
Can Sun, also responsible for reviewing Alameda’s loans to FTX executives, claimed ignorance regarding the source of these funds. Sun even admitted to personally borrowing $2.3 million from Alameda to purchase a house in the Bahamas.
Amid FTX’s crisis in November 2022, Can Sun escalated the issue to the highest management. However, he only received empty promises, and no concrete measures were implemented.
The shock intensified when Can Sun disclosed that Alameda’s unsettled account still allowed the fund to borrow money from FTX users. In alignment with his principles, Sun resigned immediately upon learning of this.
The trial will be on a one-week hiatus and is scheduled to resume on October 26.
Report on the trial of former FTX CEO Sam Bankman-Fried:
- Day 1&2: Opening statements by the prosecutor and defense attorney
- Day 3: Crucial witnesses Adam Yetitia, Matt Huang
- Day 4: Former Chief Technology Officer of FTX Gary Wang
- Day 5&6: Former CEO of Alameda Research Caroline Ellison
- Day 7: Caroline Ellison and former Alameda Research programmer Christian Drappi
- Day 8: BlockFi CEO Zac Prince
- Day 9: Former FTX Technical Director Nishad Singh
- Day 10: SBF met with world leaders weeks before the collapse of the FTX exchange
- Day 11: Professor of Accounting and Auditing Peter Easton
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