Attorneys for disgraced FTX cofounder Sam Bankman-Fried want to mention his $500 million investment in AI startup Anthropic in court, and prosecutors are not happy.
In a filing late Sunday, attorneys for the U.S. District Court for the Southern District of New York filed a letter asking the judge to prevent SBF’s attorneys from introducing any evidence related to the investment made by Bankman-Fried last year, saying that it's irrelevant to the case.
Anthropic reportedly is looking to raise new funding at a valuation between $20 billion and $30 billion, according to the letter signed by U.S. Attorney Damian Williams and other prosecutors. Although a higher valuation could in theory raise the value of SBF’s Anthropic investment and make available more money for FTX victims via bankruptcy proceedings, prosecutors argue that the potential increase in Anthropic’s valuation is highly speculative. They pointed out that FTX also was once valued in the billions of dollars and yet “today its shares are worth nothing.”
Prosecutors also argued in the letter that whether or not FTX customers are repaid is not important to Bankman-Fried's defense.
“Even if there were any arguable probative value to this evidence, it would be substantially outweighed by the risk that such evidence would cause unfair prejudice, confuse the issues, mislead the jury, cause undue delay, and waste time,” the letter reads.
The government cites several cases in which requests to mention whether fraud victims would ultimately be made whole were found to be irrelevant to the charges presented. Prosecutors argue that if evidence like this is allowed to be introduced in court it would require a “mini trial” to examine the value of assets available through the FTX bankruptcy and how much of what customers and creditors have lost could be covered by those assets.
“The Indictment alleges that the defendant committed wire fraud by misappropriating FTX customer deposits to make investments and other expenditures,” the filing reads. “It is immaterial whether some of those investments might ultimately have been profitable.”
Tech news outlet The Information reported last week that Anthropic, one of the main competitors for Sam Altman’s OpenAI, was in talks to raise $2 billion after getting a $1.25 billion investment commitment from Amazon. New investments in the company could quintuple its $4 billion valuation from March, according to The Information. The two-year old company runs an AI chatbot called Claude.
