In a detailed letter to Judge Lewis Kaplan, the legal representatives for Sam Bankman-Fried, the embattled founder of cryptocurrency exchange FTX, have vehemently argued against the government’s recommendation for a 50-year prison sentence, labeling it as a “medieval view of punishment.” Legal Team Contests Proposed 50-Year Sentence for Sam Bankman-Fried as Unjust and Excessive In […]
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Arbitrum Proposal to Fund Tornado Cash Developers Defense Withdrawn
A proposal aiming to contribute to funding the legal defense of the developers of Tornado Cash, the Ethereum-based mixing platform, was removed by the Arbitrum community over apparent legal concerns. Devansh Mehta, lead of the working group of the Arbitrum treasury, criticized the move, stating that there was “absolutely nothing wrong with paying for the […]
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US Defense Department Urged to Integrate Bitcoin to Maintain Superpower Status
A U.S. Space Force major has urged the Department of Defense to integrate Bitcoin as an “offset” strategy. Emphasizing that “Integration of this technology could revolutionize national defense strategies in cyberspace,” he stressed: “Addressing this could be vital for the U.S. to maintain its position as a global superpower and leader among nations.”
‘Bitcoin Represents Not Just a Financial Innovation but a Paradigm Change in Cybersecurity’
Major Jason Lowery wrote an open letter to the Defense Innovation Board on Dec. 2 regarding “the national strategic importance of Bitcoin,” he described on Linkedin. Lowery is an astronautical engineer serving in the U.S. Space Force, the newest branch of the U.S. Armed Forces. The Defense Innovation Board provides independent recommendations to Department of Defense (DOD) leaders on emerging technologies and innovative approaches that the DOD should adopt to ensure U.S. technological and military dominance.
“During my studies at the Department of the Air Force’s Air Command and Staff College, we were introduced to the concept of an ‘offset’ as a strategy that leverages technological advancements to counterbalance or negate an adversary’s traditional military strengths or numerical superiority,” Lowery explained in his letter. “I contend that reusable proof-of-work [PoW] networks like Bitcoin represent an offset strategy for the 21st century.”
He claimed that it’s a misconception that Bitcoin’s use is “limited to protecting financial information rather than practically all forms of data, messages, or command signals,” noting: “As a result, this misconception underplays the technology’s broad strategic significance for cybersecurity, and consequently, national security.” He wrote:
Bitcoin represents not just a financial innovation but a paradigm change in cybersecurity, aligning perfectly with the concept of a strategic offset.
After explaining his thesis, Lowery stated: “Proof-of-work technologies, as exemplified by Bitcoin, have the potential to significantly reshape our understanding of warfare in the cyber domain.”
He continued, “Considering their proven impact, it’s advisable for the Department of Defense to begin formally investigating the cyber security applications of these technologies,” emphasizing: “Integration of this technology could revolutionize national defense strategies in cyberspace and lead to a major shift in how to handle cyber conflicts.”
In conclusion, Lowery stated: “I strongly recommend that the Defense Innovation Board advise the Office of the Secretary of Defense to prioritize the investigation of the national strategic importance of proof-of-work protocols like Bitcoin.” He described:
Addressing this could be vital for the U.S. to maintain its position as a global superpower and leader among nations, especially in an increasingly digital and interconnected world plagued by cybersecurity vulnerabilities.
While many in the crypto community commend Lowery for taking the initiative, some pointed out that this thesis is inaccurate. “Lowery spins a nice narrative, unfortunately it’s nonsense,” said Bitcoin proponent Jameson Lopp, citing his own analysis that highlighted key points of disagreement. Peter McCormack also noted, “His thesis is wrong,” referencing Matthew Pines, director at cybersecurity firm Sentinelone, who explained in a series of posts on X: “Cybersecurity is about ensuring the Confidentiality, Integrity & Availability of networks and data. There is no magic bullet that comes from PoW, which is a consensus mechanism.”
Do you think the Department of Defense will heed Lowery’s advice and integrate Bitcoin? Let us know in the comments section below.
Ex-FTX Chief’s Defense Team Challenges FBI Interviews, Raises Questions About Witness Credibility
On Wednesday, the defense team for the former FTX CEO Sam Bankman-Fried issued a letter to the judge seeking to question two FBI agents who interviewed Gary Wang, former chief technology officer of FTX, and Nishad Singh, former director of engineering at FTX. Lawyers allege the witnesses provided “inconsistent statements” that don’t match their original interviews with the agents.
Former FTX Executives’ Testimonies Under Scrutiny in Ongoing Bankman-Fried Trial
Lawyers for Sam Bankman-Fried are interested in the “elicited testimony” gathered by two FBI agents who interviewed Gary Wang and Nishad Singh. The letter says Wang was questioned on October 6, and they asked him about specific statements he gave to the special agents on November 17, 2022, and December 7, 2022.
“Mr. Bankman-Fried’s counsel specifically asked Mr. Wang whether [a] reference to notes that the FBI Agents had prepared on Form 302 refreshed his recollection of his statements to the FBI Agents at those interviews,” the letter details. “On each of these occasions, Mr. Wang denied having made or claimed not to recall having made the statements recorded in the Form 302.”
The attorneys also delved into the reported special code privileges called “allow negative” that benefited Alameda, and Wang may have been “pressured or incentivized” to provide prosecutors with an “innocent explanation.” Bankman-Fried’s lawyers also noted similar instances when they cross-examined Nishad Singh on October 17, 2023. Singh was interviewed by the U.S. government on January 4, 2023, and January 19, 2023.
Again with Singh, the lawyers said they tried to refresh his recollection of the testimony, but he wasn’t able to remember everything he said during the interviews. The witnesses’ “inability to recall” these types of statements goes against the credibility of their testimony, the lawyers stressed. Bankman-Fried’s attorney, Mark Cohen, disclosed Wednesday that his client would testify in his trial. The testimony was set for Thursday, but the latest letter from the defense team could disrupt that plan.
Attorneys are calling for the testimony of FBI agents regarding their initial interviews with Singh and Wang. While pleading not guilty to all charges leveled against him, Bankman-Fried maintains his innocence.
What do you think about the defense team’s letter to the judge in the Bankman-Fried case? Share your thoughts and opinions about this subject in the comments section below.
Congressional Investments in Defense Stocks Raise Ethical Eyebrows Amidst Ongoing Wars
In the midst of ongoing strife in Ukraine and Israel, stocks of publicly listed defense corporations have seen a dramatic surge. Simultaneously, U.S. government officials have backed substantial war expenditures, and reports indicate a multitude of politicians reaping financial benefits from investments in defense companies such as Palantir, L3Harris, Lockheed Martin, and Northrop Grumman.
Legislators’ Stakes in Defense Giants Under Critical Lens Amid Global Conflicts
Since February 24, 2022, the Biden administration has stood by Ukraine amidst its clash with Russia, with approximately billion allocated to aid Ukraine’s military endeavors. Recent tensions between Hamas and Israel have further escalated the situation, with numerous U.S. politicians advocating for military action. Consequently, the stock prices of publicly listed defense corporations have soared, surpassing most Wall Street equities. For instance, Lockheed Martin’s (NYSE: LMT) stock has seen a 3.8% increase over the last 30 days.
Northrop Grumman (NYSE: NOC) has experienced an over 13% rise, Palantir (NYSE: PLTR) has seen a 10% spike, and L3Harris (NYSE: LHX) has grown 4.4% against the U.S. dollar in the past month. On the social media platform X (previously known as Twitter), an account named “Unusual Whales” has been shedding light on the U.S. officials investing in defense corporations amidst the dual conflicts.
“Just in, another U.S. Congressman has ONCE AGAIN bought war stocks before the Israel and Palestine conflict,” Whales posted. “Representative Josh Gottheimer purchased up to ,000 of Northrop Grumman Corp, NOC, on Sept. 26, 2023. He sits on the National Security Agency and Intelligence Committees,” the account added. The X account has further revealed a long list of politicians, spanning both Democratic and Republican parties, who have invested millions in defense corporation stocks.
The NOC purchase by Gottheimer can be tracked on quiverquant.com, alongside other U.S. policymakers who hold significant investments in Wall Street, particularly in defense corporation shares. Other NOC investors include Democratic Congressman Daniel Goldman and Democratic Congresswoman Kathie Manning. Lockheed Martin shares are held by Republican Congressman Kevin Hern, who recently bought shares of RTX (Raytheon) on September 7, 2023. Senate Republican Markwayne Mullin also invested between K to K in RTX the following week.
Even prior to the Israel-Hamas confrontation, the Ukraine-Russia conflict saw a significant number of U.S. politicians profiting from investments in defense corporations. The issue with policymakers investing in defense stocks lies in the fact that defense corporations often allocate substantial resources for lobbying. These companies engage in lobbying activities to sway Congress and other U.S. government sectors. Their lobbying goals range from securing defense contracts, shaping defense policy, to ensuring the persistence of high military spending.
Many believe that there’s a glaring conflict of interest in U.S. politicians investing in defense stocks while backing several wars. Anti-war activists insist it poses a moral quandary. To activists, it is unsettling that the very individuals entrusted with the nation’s welfare are profiting from the escalation of war and violence. This murky intertwining of war politics and personal gain threatens the ethical underpinning of any type of governance, casting a dark shadow on the integrity of political decision-making.
What do you think about the U.S. politicians profiting from war stocks? Share your thoughts and opinions about this subject in the comments section below.
Bankman-Fried’s Defense Targets $300M Loan Interrogations; Ex-CTO Gary Wang Spotlighted
Attorneys defending ex-FTX chief Sam Bankman-Fried are keen to interrogate the former CTO of the now-dissolved exchange concerning personal loans ranging from 0-300 million, a fresh letter from Cohen & Gresser LLP reveals. Former CTO Gary Wang is set to return to the stand on Tuesday, with reports suggesting that ex-Alameda Research CEO Caroline Ellison will follow suit.
0M Loans Under the Microscope in FTX Legal Battle
A letter from the attorneys representing Sam Bankman-Fried seeks permission from the judge to allow certain lines of questioning during the cross-examination of Gary Wang, a witness for the prosecution. The defense wants to question Wang about the involvement of FTX attorneys in structuring and executing personal loans worth 0-300 million that Wang received from Alameda Research to fund investments and purchase property.
The prosecution’s direct examination of Wang already revealed that FTX attorneys were involved with the loans, according to the lawyer Chris Everdell at Cohen & Gresser LLP. The defense argues this line of questioning is relevant to Bankman-Fried’s good faith and lack of criminal intent regarding the money laundering conspiracy charge. The indictment alleges Bankman-Fried took steps to conceal the source of funds for investments as coming from FTX customer funds transferred through Alameda.
Questioning Wang about his understanding that the loans were structured by lawyers, memorialized in notes, and imposed real obligations could rebut the claim the loans were a sham to conceal the source of funds. Wang reportedly told the prosecution he relied on the lawyers regarding the loans and did not think they were designed to be illegal or conceal Alameda as the source of funds.
This corroborates Bankman-Fried’s understanding that the loans were proper. Consequently, the defense seeks the judge’s approval to probe Wang on these subjects during cross-examination. Last week, Wang shared insights with the judge about Alameda’s unique advantages and a whopping billion credit line. He detailed how, in collaboration with developer Nishad Singh, they crafted the “allow negative” function, permitting Alameda to trade without backed credit. After the cross-examination, former Alameda Research CEO Caroline Ellison is slated to testify.
What do you think about the lawyer’s letter to the judge about Wang’s cross-examination? Share your thoughts and opinions about this subject in the comments section below.
DOJ Clamps Down on SBF’s Regulatory Loophole Defense Amid Ongoing Fraud Trial
The Department of Justice (DOJ) has asked the judge in Sam Bankman-Fried’s (SBF) criminal case to restrict several planned defense arguments about financial regulations. Prosecutors said in a new court filing that SBF should not be allowed to claim he’s innocent because cryptocurrency exchanges faced little regulation. They also argued he can’t use his compliance with U.S. laws as proof of good faith.
Prosecutors Seek to Limit SBF’s Defense Arguments About Regulations
In the Wednesday letter, federal prosecutors asked U.S. District Judge Lewis Kaplan to reconsider or clarify a recent order limiting trial evidence. They aim to block Sam Bankman-Fried (SBF) from arguing that FTX’s lack of U.S. oversight made his actions legal. Prosecutors called the alleged claim “inaccurate” and “highly misleading.” They said criminal laws still banned misappropriating customer assets.
“While the existence of a law might be relevant to establish a statutory duty of care, the absence of regulation is not relevant to whether money was, in fact, entrusted to the defendant’s care by his victims,” federal prosecutors wrote. “And evidence or argument about the absence of regulation is only likely to confuse the jury into believing that there must be a regulation imposing a duty for misappropriation to have occurred.”
Prosecutors also urged Kaplan to bar SBF from citing his adherence to U.S. rules for the FTX U.S. exchange. They argued that general legal compliance doesn’t prove his innocence on specific charges like fraud. Prosecutors led by U.S. Attorney Damian Williams said SBF can present evidence of a “good-faith belief” that moving FTX customer funds was allowed. But they contend following other laws is irrelevant to his intent.
“As the court did with evidence of other exchanges’ actions, if the defendant were to be permitted to inquire about regulations, the absence of regulations, or regulation of FTX US, the government respectfully submits that the defendant should be required to give notice to the court prior to questioning a witness about it,” the letter from Williams details.
Additionally, prosecutors want to restrict SBF from rebutting their evidence about FTX’s bankruptcy. They argued the failure is directly relevant to SBF’s alleged fraud conspiracy. Prosecutors also asked the judge to clarify that SBF can present “admissible evidence” about philanthropy, but not prop up his character.
SBF’s trial on fraud and other federal charges started on Tuesday, October 3, 2023, and jury selection has continued into Wednesday. As of writing, his lawyers have not yet responded to the prosecution’s latest motions.
What do you think about the federal prosecutors’ motions submitted on Wednesday? Share your thoughts and opinions about this subject in the comments section below.
Do Kwon’s Defense Declares SEC’s Deposition Request ‘Impossible’ Amid Ongoing Detention Saga
The legal team defending Do Kwon, the co-founder and former CEO of Terraform Labs, argues that the U.S. Securities and Exchange Commission (SEC) lacks the capacity to depose Kwon, deeming it an “impossible” feat. Kwon’s legal counsel additionally maintains that the SEC’s bid for a preclusion order is premature, given that no summary judgment motion has been tendered by either side, and the cutoff for such motions remains a month away.
Do Kwon’s Lawyers Label Deposition Bid ‘Impossible’
In a document tendered to the court on September 22, 2023, it’s unveiled that the SEC is seeking authorization to interrogate the former CEO of Terraform Labs, Do Kwon. “With less than a month left in discovery, however, the SEC has not yet been afforded a critical discovery tool used in nearly every civil case—the deposition of the defendant,” the court document highlighted.
Yet, another court submission by Kwon’s legal counsel on September 27, underscores their stance that such a request is “impossible,” urging for the SEC’s petition to be rejected.
“The SEC’s motion seeks leave to take the deposition of Defendant Do Kwon in the United States before October 13, 2023, even though the SEC knows that Mr. Kwon is detained in Montenegro with no scheduled release or extradition date,” Kwon’s attorneys wrote. The former Terraform Labs CEO’s legal team added:
The motion should be denied because it would be impossible for Mr. Kwon to appear for such a deposition.
The Terra blockchain ecosystem helmed by Kwon crumbled in May 2022, leading to his arrest in Montenegro in March 2023 over the use of falsified passports. This particular misstep landed Kwon a four-month tenure in the Montenegro prison system. His lawyers emphasize that Kwon has already faced the inquisitor’s chair on multiple instances. They underscored an alleged 21-hour discourse Kwon had with the SEC during their meticulous two-year-long probe.
This interrogation saga unfolded over two distinct days, with Kwon reportedly engaging for a solid five hours on each occasion, augmented by a five-hour session orchestrated by the Monetary Authority of Singapore, with the SEC in attendance. The narrative further includes another voluntary six-hour rendezvous with the SEC, as articulated by the legal representatives from Dentons US LLP.
The lawyers insist the “SEC’s motion relies on misrepresentations about irrelevant evidence to support its spurious claim that it has been unable to get discovery from Mr. Kwon.” Authorities from South Korea and the United States have sought Kwon’s extradition for his purported involvement in the downfall of the Terra blockchain ecosystem and the UST de-pegging debacle.
What do you think about Kwon’s lawyers telling the SEC that it is “impossible” to depose the Terra founder? Share your thoughts and opinions about this subject in the comments section below.
Defense Distributed Unveils ‘Gatgpt’ – Championing the Digital Second Amendment and AI Freedom
As artificial intelligence (AI) and large language models (LLMs) continue to gain prominence, the organization Defense Distributed has unveiled an experimental LLM-based agent named “Gatgpt.” The platform is being referred to as “The Digital Second Amendment,” and the LLM is trained on a combination of open-source and proprietary firearms files, texts, and datasets.
Cody Wilson’s Defense Distributed Steps Into Generative AI
Cody Wilson and his organization, Defense Distributed (DD), are well-known for advocating fundamental privacy rights and the right to bear arms. Wilson is also the co-creator of the now-defunct bitcoin (BTC) wallet, Dark Wallet, and the inventor of the first functional 3D-printed firearm, known as the Liberator. Now, Wilson and DD are entering the era of AI with a generative chatbot project called “Gatgpt,” an LLM that enhances open-source gun datasets in support of “the interests of American riflemen.”
“The Digital Second Amendment” document hosted on the website explains that current “AI journalism is uniformly produced in assistance of the narrative that the public requires regulation in advance of a national security event or, as is more fashionable, because the public cannot be trusted to live online with its own information interests.” The missive opines that American journalism is now simply an extension of the government. DD’s new generative chatbot aims to combat the propagandized narratives.
The firm details:
Defense Distributed, in releasing Gatgpt, declares a Digital Second Amendment. Americans must have access to compute, databases, and AI models, the newest weapons of the digital age, not just to defend ourselves against corporate and government depredations, but to defend our civic identity and humanity.
Currently, Gatgpt is in private beta, and users will receive invitations to test the model. Beta testers are selected to provide feedback on Gatgpt’s responses. Through collaboration with beta testers and DD’s partners, the organization aims to create “the Internet’s best, unbiased public resource for firearms information.” Beta testers are required to pay a upfront fee to access the platform, and DD plans to introduce a monthly subscription service in the future.
The website states that Gatgpt was “built by expert engineers, scholars, and activists” and trained on “datasets disputed by private and government agencies.” Furthermore, DD’s Digital Second Amendment argues that AI regulation infringes upon the rights of Americans.
“AI regulation is an open and official provocation against the Liberty and Sovereignty of American citizens,” the declaration says. “All who advocate for it are domestic enemies of the Constitution and must be absolutely opposed. The right of the people to keep and deploy models shall not be infringed.”
What do you think about DD’s new Gatgpt platform? Share your thoughts and opinions about this subject in the comments section below.
FTX’s-Sam Bankman-Fried Puts Trial Defense Together With 7 Expert Witnesses
Sam Bankman-Fried (SBF), the founder of the defunct FTX exchange, is set to face trial in October, barring any postponement. Amid the fracas, the former exchange CEO has maintained that he isn’t guilty of all these charges leveled against him and will be reportedly bringing expert witnesses to prove his innocence.
Sam Bankman-Fried Defense To Call Seven Expert Witnesses
According to a Bloomberg report, Sam Bankman-Fried is employing the services of seven different expert witnesses to help bolster his case. These expert witnesses may form part of SBF’s defense, and if so, they will be allegedly paid ,200 an hour to testify in favor of FTX’s former CEO.
This means that SBF’s defense could be spending up to ,400 an hour for these expert witnesses, a staggering figure given that high-profile trials like these can drag out for a long time.
This list of expert witnesses released so far includes Lawrence Akka, Thomas Bishop, Brian Kim, Joseph Pimbley, Bradley Smith, Peter Vinella, and Andrew Di Wu.
Expert witnesses are persons with specialized knowledge in a particular field. They are usually called upon in court proceedings to break down complex or technical issues that the Judge and the jury may not be conversant with.
According to the defendant’s notice, SBF’s expert witnesses will give evidence of various issues, including campaign finance laws, the finances of FTX and its sister company, Alameda Research, and the crypto exchange’s software infrastructure.
However, it is surprising that SBF is calling an expert witness to give background information on the US campaign finance laws, considering that the prosecution had dropped the charge of him violating campaign finance rules.
The charge was dropped because it didn’t form part of the US government’s extradition agreement with the Bahamas government, and thus had no legs to stand on. But it seems defending himself against such allegations is important to the FTX founder given he is preparing a defense for it.
DOJ Objects To SBF’s Expert Witnesses
In reply to SBF’s notice of his expert witnesses, the government has filed a motion to exclude the testimony of these witnesses. The prosecutors argue that these experts and their accompanying disclosures suffer from an “array of deficiencies” that necessitate their exclusion.
For one, their opinions have no basis as required by the Federal Rule of Criminal Procedure. According to the prosecutors, their opinions, among other things, are “irrelevant, unfairly prejudicial, and confusing to the jury.”
They further argue that these experts will offer legal conclusions that “invade” the power of the court and the jury, so the court should exercise its “gatekeeping authority” and preclude their testimonies.”
The Prosecutor’s motion contains extensive arguments on why each of these expert witnesses’ opinions should be excluded. They stated that Professor Smith’s testimony is “irrelevant, confusing, and a waste of time” since SBF’s trial doesn’t include a charge stemming from the defendant’s “illegal campaign finance scheme.”
Meanwhile, they argue that Mr. Vinella’s testimony should be excluded on the grounds of qualifications, relevancy, and admissibility. If rejected, they have the court to grant them a Daubert hearing to evaluate his “qualifications, methodology, and the relevance and reliability of his proposed testimony.
Mr. Vinella seems to be SBF’s primary expert witness as he is set to opine on various topics, including FTX’s operations and how the company took “commercially reasonable steps” to protect customers’ funds despite the lack of regulatory clarity in the US.
SBF currently faces seven counts of financial fraud, including wire fraud on FTX and Alameda customers, securities fraud, and money laundering.