'Absolutely Not': FTX's Former General Counsel Says He Never Approved Loans of Customer Funds
Can Sun, FTX's general counsel from August 2021 to the time of the exchange’s collapse in November 2022, testified in the Sam Bankman-Fried fraud trial.
Updated Oct 20, 2023, 3:39 p.m. Published Oct 19, 2023, 4:13 p.m.
NEW YORK – FTX’s general counsel “never approved” the crypto exchange lending customer funds to sister firm Alameda Research, he told the jury on day 12 of Sam Bankman-Fried’s criminal fraud trial.
Can Sun, who was the general counsel at FTX from August 2021 to the time of the exchange’s collapse in November 2022, said “absolutely not” when asked Thursday whether he signed off on Alameda’s use of FTX customer funds.
Sun testified he believed FTX customers' funds were kept segregated from the company’s own funds, based on conversations he’d had with Bankman-Fried.
Assistant U.S. Attorney Danielle Sassoon walked Sun through FTX’s terms of service and other public statements supporting the Department of Justice’s thesis that FTX misappropriated customer funds.
Various documents said FTX customer funds were supposed to be “ring-fenced” from FTX’s own funds, Sun said.
Sun, who testified under a non-prosecution agreement, also described how he tracked loans to FTX and Alameda executives – but his record of the loans did not match another document the DOJ showed him, he said.
Throughout his testimony, he reiterated that he did not know customer funds were involved in those loans.
After a brief cross-examination, Sun wrapped his testimony in the late morning.
From $60 million to zero
Robert Boroujerdi, a director at Third Point, the investment firm founded by Dan Loeb, briefly took the stand, testifying that his company invested $60 million in FTX.
The investment is now worth $0, he said.
Third Point saw both audited and unaudited financials, said Boroujerdi, a veteran of Wall Street investment banking colossus Goldman Sachs.
The trial will resume next Thursday, Oct. 26, with the DOJ's final witnesses. Prosecutors said at the opening of Thursday's session that they expected to wrap up quickly after the week-long break. The defense will begin presenting its case – if it chooses to do so – after lunch on Thursday, Oct. 26.
Bankman-Fried has not yet said whether he will testify in his defense.
Read all of CoinDesk’s SBF trial coverage here.
Nikhilesh De
Nikhilesh De is CoinDesk's managing editor for global policy and regulation, covering regulators, lawmakers and institutions. When he's not reporting on digital assets and policy, he can be found admiring Amtrak or building LEGO trains. He owns < $50 in BTC and < $20 in ETH. He was named the Association of Cryptocurrency Journalists and Researchers' Journalist of the Year in 2020.
Elizabeth Napolitano
Elizabeth Napolitano was a data journalist at CoinDesk, where she reported on topics such as decentralized finance, centralized cryptocurrency exchanges, altcoins, and Web3. She has covered technology and business for NBC News and CBS News. In 2022, she received an ACP national award for breaking news reporting.
