Former legal advisor of FTX, Can Sun, appeared in court, shifting all responsibility to SBF and former executives of FTX.

FTX's former general counsel Can Sun appeared in court on Thursday, cooperating with the prosecution under a non-prosecution agreement to clear any criminal activities related to FTX.

FTX Customer Assets Misappropriation Completely Unaware

According to a report by TechCrunch, Can Sun joined FTX at the end of August 2021 and resigned in early November 2022 before FTX went bankrupt.

His testimony appears to be aimed at protecting himself from criminal liability, including:

• SBF had indicated to him that "FTX user deposits are clearly segregated and protected."

• Can Sun emphasized that he never approved FTX to use customer assets.

• Can Sun claimed to be unaware of Alameda misappropriating customer deposits.

• When Can Sun started, the "FTX Terms of Service" were largely finalized.

Alameda Not Subject to Liquidation Until August 2022

Can Sun stated that he learned in August and September that Alameda would not be liquidated in FTX, he was shocked and requested the feature to be removed, but was rejected by SBF and executives Gary Wang, Nishad Singh, and others.

The judge asked Can Sun why he did not resign after learning about Alameda's privilege?

Can Sun explained that he was not aware at the time that Alameda's privilege also included misappropriating FTX customer assets.

Failed Financing with Apollo Revealed Misuse of FTX Assets

Four days before the bankruptcy of FTX on 11/07/2022, FTX attempted to obtain financing from Apollo Global Management, Can Sun discovered through financial statements shared with Apollo that FTX had a shortfall of up to $7 billion.

Can Sun's inquiries were fruitless, pointing out that SBF was typing on a laptop and hardly speaking; Chief Engineer Nishad Singh appeared pale.

That night, Can Sun finally learned from Nishad Singh's statement that Alameda had withdrawn several billion dollars of user funds from FTX.

Can Sun resigned the next day.

Recording Executive Loans, Can Sun Also Took $3.5 Million

Can Sun also documented over 30 loans from executives such as SBF, totaling over $2.17 billion. He stated:

I thought the loans from SBF and others were to inject more money into FTX for financing, I didn't know customer funds were misappropriated.

In January 2022, just about 5 months after joining FTX, he also received a $3.5 million bonus.

Currently, the top three executives of FTX/Alameda and other key witnesses have appeared in court, while the defense for SBF seems to have not presented any favorable rebuttals yet.