From FTX founder Sam Bankman-Fried’s makes an attempt to lift firm funds from the Crown Prince of Saudi Arabia to utilizing Thai prostitutes’ identities in an try to unfreeze crypto accounts, the second week of Bankman-Fried’s felony trial proved damning for the disgraced “king of crypto.”
FTX co-founder comes clear
The week started with FTX co-founder, Gary Wang, ending up his time on the witness stand after admitting he enacted “particular privileges” inside FTX’s coding particularly for sister firm, Alameda Analysis.
Testifying beneath a cooperation settlement with the U.S. authorities, Bankman-Fried’s protection made it some extent to indicate Wang could possibly be biased in his solutions in hopes of receiving a diminished sentence all through his cross-examination. Nevertheless, the prosecution rebutted by noting Wang supplied them with info earlier than he even obtained a cooperation settlement.
Former Alameda CEO provides compelling testimony
Shortly after Wang concluded his cross-examination, former Alameda CEO Caroline Ellison took the stand because the prosecution’s star witness. In her testimony, she revealed that Bankman-Fried “directed” her to falsify quite a few steadiness sheets to make FTX and Alameda extra engaging to traders with out revealing the theft of FTX buyer funds. Equally, Ellison and Bankman-Fried put collectively quite a few spreadsheets that tried to foretell the probabilities of Alameda and FTX’s collapse.
Ellison claimed she felt she “wasn’t skilled” when she grew to become CEO of Alameda
When Ellison tried to give up months earlier than Alameda and FTX went beneath, Bankman-Fried stopped her, telling her she was “too vital” to take action.
Prostitutes, bribery, and Saudi Arabian royalty
In an explosive piece of proof, Ellison claimed Bankman-Fried resorted to producing pretend accounts seemingly belonging to Thai prostitutes on OKX and Huobi in an try to achieve management of their frozen accounts price $1 billion. Nevertheless, when the plan failed, Bankman-Fried resorted to bribing Chinese language authorities officers. Ellison revealed Bankman-Fried then shouted at an FTX worker involved in regards to the bribery scheme to “shut the f–k up!”
In one other twist, the fallen FTX founder tried to lift funds from the Crown Prince of Saudi Arabia, Mohammed bin Salman Al Saud, when his crypto empire discovered itself struggling in mid-2022. Nevertheless, these makes an attempt had been unsuccessful, with FTX finally collapsing in November of 2022.
Bankman-Fried nervous about optics
Equally important. Ellison painted Bankman-Fried as hyper-focused on his picture regardless of dressing “sloppily.” In accordance with Ellison, Bankman-Fried believed his unkempt hair was “very useful” and that it was “an vital a part of FTX’s narrative and picture.” Furthermore, he attributed his distinctive coiffure as being the explanation he acquired “larger bonuses” throughout his prior employment at proprietary buying and selling agency, Jane Avenue Capital.
Ellison then claimed Bankman-Fried utilized Twitter as “a useful technique to domesticate buyer prospects and to assist management the narrative round FTX.” Moreover, the previous Alameda CEO alleged that Bankman-Fried switched from driving a luxurious car to a Toyota Corolla to ensure that it to look “higher for his picture.”
When a Bloomberg article got here out criticizing the shut ties between Alameda Analysis and FTX, Bankman-Fried grew to become involved and said that the businesses wanted to be “extra cautious about avoiding any unhealthy PR.” By Fall 2022, Bankman-Fried renamed a number of totally different associated enterprise investing entities in an try to separate them from being “related to Alameda.”
Ellison’s romantic relationship with Bankman-Fried was “unequal”
One other fascinating part of Ellison’s testimony got here when she mentioned her romantic relationship with the FTX founder.
In an on-again, off-again relationship for quite a few years, Ellison advised jurors she shared her emotions of “private writings” together with her then-boyfriend. In them, Ellison mentioned emotions of “unhappiness” relating to the 2’s relationship, together with “emotions in regards to the intersection of our private {and professional} relationship.”
Ellison claimed that the dynamic made her “really feel unhealthy” and like an “unequal associate” of their relationship. By mid-2022, the 2 had separated for the ultimate time.
The previous Alameda CEO later revealed in her testimony that her new boyfriend, a former worker of FTX/Alameda, was current when the FBI raided her home as a part of their investigation.
At one level, the prosecution famous that Bankman-Fried had “laughed, visibly shaken his head, and scoffed” throughout Ellison’s testimony. The protection rebuked this, claiming that the prosecution was trying to color him as a “very soiled individual.”
Ellison breaks down on the witness stand
The previous Alameda CEO wiped away tears as she recalled having an “overwhelming feeling of relief” when FTX lastly collapsed.
In a message to Bankman-Fried round November seventh, 2022, Ellison wrote she had “an rising dread of this present day,” claiming it had been “weighing” on her.
“…It simply feels nice to get it throughout with,” she wrote.
Whereas she famous “it was the worst week” of her life, she was consoled that she “did not must lie anymore” and “may begin taking accountability” for her crimes.
BlockFi founder testifies
Zac Prince, the founding father of digital asset lending firm, BlockFi, began and finished his testimony against Bankman-Fried Friday in Manhattan federal courtroom.
In accordance with Prince, BlockFi started lending to FTX round “in the direction of the top of 2020 or first-half of 2021,” with FTX’s borrowing rising over time. When FTX was unable to repay loans and filed for chapter in early November 2022, BlockFi was compelled to comply with swimsuit shortly after.
Prince claimed BlockFi misplaced “a little bit over $1 billion” consisting of $650 million in excellent loans and $350 of buyer funds on FTX itself. Had BlockFi identified the reality about FTX and Alameda’s funds, Prince stated his firm “most likely would not have lent to them within the first place.”
Bankman-Fried shook his head all through a number of moments of Prince’s testimony. His dad and mom, Stanford Legislation faculty professors, Joseph Bankman and Barbara Fried, have attended daily of the trial. If convicted, Bankman-Fried may serve as much as 110 years in federal jail.
