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SBF's lawyers shouldn't be allowed to use his $500 million investment in AI firm Anthropic — which could used to pay back FTX customers — as evidence, prosecutors say

Sam Bankman-Fried stands as he is introduced to prospective jurors for his fraud trial over the collapse of FTX, the bankrupt cryptocurrency exchange, at Federal Court in New York City, U.S., October 3, 2023 in this courtroom sketch
A court sketch of Sam Bankman-Fried.REUTERS/Jane Rosenberg
  • FTX invested $500 million in Anthropic, the AI startup, last year.

  • Anthropic looks set to be valued at $30 billion as it is in talks with Google for further investment.

  • Prosecutors argue that the investment can't be used as evidence in Bankman-Fried's favor.

Prosecutors have asked the judge overseeing Sam Bankman-Fried's trial to stop the FTX founder's lawyers from referencing his $500 million investment in Anthropic.

In Sunday's letter to US District Judge Lewis Kaplan, US Attorney Damian Williams said "the defense may seek to elicit evidence about the current value of the defendant's investment in Anthropic."

The AI startup was founded in 2021 but has seen an influx of investments since the sector has boomed over the last year. In June, Anthropic was valued at $4.6 billion and FTX's stake was worth nine-figures, according to Semafor.

It has only increased in value since then. After Amazon agreed to invest $4 billion, Anthropic is in discussions with Google and other firms for further investments that could see it valued at $30 billion, according to The Information.

That means Bankman-Fried's investment could be a major help in reimbursing the thousands of FTX customers who lost their money as the crypto exchange imploded last November.

But prosecutors in Bankman-Fried's trial argue that this shouldn't be used as evidence in his favor. They referenced an earlier judgement in the case that "it is immaterial as a matter of law whether the defendant intended to repay the misappropriated funds."

"Such evidence would therefore be wholly irrelevant, and present a substantial danger of unfair prejudice, confusing the issues, misleading the jury, undue delay, and waste of time," Williams wrote in Sunday's letter.

Bankman-Fried has pleaded not guilty to seven charges including wire fraud and conspiracy to commit money laundering. Gary Wang, the FTX cofounder, testified last Friday that the company's sister hedge fund, Alameda, had a $65 billion line of credit with the crypto exchange. That would mean it could spend huge amounts by drawing on customers' deposits.

Michael Lewis, who interviewed Bankman-Fried more than 100 times for his biography, wrote that other FTX executives didn't approve of the Anthropic investment. Ramnik Arora, the FTX head of product, told Lewis: "I said to Sam after he did it: 'We don't know a fucking thing about this company.'"

According to Lewis, Bankman-Fried spent $5 billion on 300 separate investments over three years.

Bankman-Fried's spokesperson did not immediately respond to Insider's request for comment, sent outside US working hours.

Read the original article on Business Insider