In an email a few months before FTX collapsed, the company falsely promised institutional customers, including hedge fund Sculptor Capital Management, that their assets would be safe in the event of an insolvency, according to a former FTX lawyer who testified at the trial of Sam Bankman-Fried.
(Bloomberg) — In an email a few months before FTX collapsed, the company falsely promised institutional customers, including hedge fund Sculptor Capital Management, that their assets would be safe in the event of an insolvency, according to a former FTX lawyer who testified at the trial of Sam Bankman-Fried.
Can Sun, who joined FTX as a general counsel in August 2021, said in a federal court Thursday that FTX Digital Markets told customers that in the unlikely event it went bankrupt, their funds would be ringfenced.
The government showed an email exchange between FTX and Sculptor as one such example.
He said while he helped structure financial transactions, he had no idea customer funds would be used inappropriately. Sun said he believed that customer funds would be fully protected, segregated and returned to them.
“I didn’t do anything wrong,” he said on the stand. Sun disclosed that he has a non-prosecution agreement with the government.
Bankman-Fried faces decades in prison over charges that he funneled FTX customer funds into an affiliated hedge fund, Alameda Research, for risky trades, political contributions and property.
Sculptor wasn’t immediately available to comment.
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