Sam Bankman-Fried Trial: Day by Day Coverage

Welcome to the live coverage of Sam Bankman-Fried’s trial.

FTX, co-founded by Bankman-Fried, also known as SBF, positioned itself as a straightforward and secure platform for cryptocurrency trading, gaining significant traction and a private valuation of over $30 billion in 2021. However, as the crypto market value dipped from $3 trillion to $1 trillion in 2022, FTX’s stability was questioned, especially after disclosures of financial entanglements between FTX and Alameda Research, another firm founded by Bankman-Fried.

The situation worsened in November 2022 when doubts arose regarding the actual financial standing of FTX, leading to a rapid decrease in FTX Token (FTT) value and a run on the exchange. By November 11, FTX filed for bankruptcy, and Bankman-Fried resigned as CEO. His legal troubles escalated with his arrest in December 2022, followed by extradition to the US, culminating in a trial that commenced on October 3, 2023, with charges of conspiracy and fraud related to FTX’s collapse.

November 2 – Day 18: The jury finds Sam Bankman-Fried guilty on all 7 charges

The previous day saw closing arguments on both sides, with the prosecution hammering on the inconsistencies and lies of the defendant as he was on the stand, and the defense painting him as a business who tried to do his best and didn’t know better.

As the prosecution has the burden of proving him guilty, they proceeded with a rebuttal, before it was up to the jury deliberation. AUSA Sassoon used this rebuttal to further paint Sam Bankman-Fried as a villain and a manipulator.

After 45 minutes of rebuttal and a 15-minute break, Judge Kaplan went on to list the different charges and explain to the jury how they should deliberate on each charge.

It took the jury a little over 5 hours to find Sam Bankman-Fried on all 7 charges. Sentencing is scheduled for March 28, the government is supposed to let Judge Kaplan know if they want to proceed with the second trial for the 5 remaining charges, including the bribery charges that were left out of this trial.

November 1 – Day 17: Both parties will present their closing arguments before the jury deliberation

The prosecution, in the person of Assistant U.S. Attorney Nicholas Roos, starts the closing arguments. They are basically a summary of the testimonies and evidence presented during the last three weeks of trial.

Both parties estimated they would be speaking for about two to three hours. The prosecution has provided a lot of evidence and testimonies to prove Sam Bankman-Fried’s guilt, including the lengthy testimonies of SBF’s former colleagues and roommates Nishad Singh, Gary Wang and Caroline Ellison.

On the other hand, the defense failed to bring a single witness that could really go against the government’s logic. Most of SBF’s testimony, and cross-examination, was built made of stories and failures to remember. Unfortunately for him, the prosecution managed to bring forward several exhibits to shine a light on his dishonesty.

October 31 – Day 16: Today marks the last day of SBF’s testimony

12:14 EST

The trial has concluded for today, with both parties having presented all of their evidence.

The defense made an attempt to pass a motion for a judgment of acquittal, but as expected, Judge Kaplan denied it. After the extensive proceedings of the last three weeks, any judge would likely make the same decision.

The closing arguments are scheduled to be delivered tomorrow morning, marking the final stage of the trial before the jury deliberates and reaches a verdict.

11:33 EST

SBF once again pretends like he didn’t know about the $8 billion hole that was Alameda:

SBF’s Cohen: You wrote about the fiat at account, what did you mean?
SBF: We had not been aware of it, the $8 billion liability. Had Alameda never had any relation with FTX, we would have had better systems in place.

SBF’s Cohen: On assets off the exchange…
SBF: Anything would have to be individualized. FTX only knows what it sees. It doesn’t know about your house. But it could be taught to. I thought we were allowed to-
Sassoon: Objection!
Judge: You can cross on it

Source : @InnerCityPress/X.com

11:28 EST

They are back from break. The judge will probably try to get the redirect finished before the lunch break.

11:02 EST

Judge Kaplan seems confident it won’t take much longer and the jury won’t need to come in on Friday. He must be getting impatient with the defendant:

SBF’s Cohen: You were asked about tweets —
SBF: Can I…
Judge Kaplan: We’ll take our morning break. And Juror 3, you’re going to make your flight.
Jury leaves.
Judge Kaplan: Not rushing you, but how much more, Mr. Cohen?
Cohen: 40 minute to an hour.

Source : @InnerCityPress/X.com

10:44 EST

AUSA Sassoon is done with the cross-examination, the defense can now proceed with redirect. The defense’s work now is to try and salvage whatever they can to reduce the number of charges the jury could find SBF guilty of.

10:16 EST

The prosecution comes back to the “bug”, which apparently was “distracting”:

AUSA Sassoon: Did your employees tell you the bug had to do with the fiat at account?
SBF: They said it. I overheard it. I was busy. It was distracting
AUSA: Your supervisees asked you to stop asking questions?
SBF: Yes and I agreed with them. I did not follow up

AUSA Sassoon: You canceled a trip to DC, and you never got to the bottom of that?
SBF: They were doing it. I had the numbers 2, 3, 4 & 5 people all telling me they were on it. I trusted them.
AUSA: You didn’t look into it?
SBF’s lawyer Cohen: Objection!
Judge Kaplan: Overruled

AUSA: You told Adam Yedidia to fix it?
SBF: It was a team
AUSA: You heard him testify he told you that Alameda still owed $8 billion?
SBF: I don’t remember him saying that.
Judge Kaplan: Mr. Bankman-Fried, did he tell you in words or substance?
SBF: I don’t recall

SBF: I don’t recall his saying it that day.
Judge Kaplan: I didn’t ask you about THAT DAY.
SBF: Oh, sorry. Yes he told me later.
Judge: Proceed.
AUSA: Call up Alameda balances, tab 2, row 13 – fiat at ftx dot com, negative 19 billion? And correction, about 7.9B?

Source : @InnerCityPress/X.com

10:12 EST

Once again, while SBF tries to deny or diminish his involvement in the spendings, AUSA Sassoon turns around to make him admit the truth, further showing dishonesty on his part:

AUSA Sassoon: Do you see K5, $600 million – that’s not a margin trade, right?
SBF: It is not.
AUSA: $500 million to Anthropic – that’s not a margin trade on FTX, right?
SBF: No it is not.
AUSA: I’m not asking if the exhibit is correct or not –
SBF: That’s correct

AUSA Sassoon: These were your decisions, right?
SBF: No. I may have authorized them.
AUSA: Anthropic, that was you?
SBF: Yes.
AUSA: K5?
SBF: Yes.
AUSA: The $35 million apartment, that was your decision?
SBF: That particular one was.

Source : @InnerCityPress/X.com

10:06 EST

SBF is being pressed on the line of credit, and how no one got fired, thus implying he was directly responsible for it:

AUSA Sassoon: Some unknown people spent $8 billion without your knowledge?
SBF: I don’t think that’s my testimony…
AUSA: When North Dimension was set up, wasn’t Caroline Ellison just a trader?
SBF: She was head of trading.

AUSA Sassoon: Did you fire anyone for spending $8 billion of customer deposits?
SBF: I don’t believe so… I don’t remember the exact timeline of things. I don’t believe that was while I was CEO.

AUSA Sassoon: You believed it was permitted, to spend the fiat deposits?
SBF: I thought it was folded into risk management. As CEO of Alameda, I was concerned with their portfolio. At FTX, I was paying attention but not as much as I should have been

Source : @InnerCityPress/X.com

09:49 EST

AUSA Sassoon now switches to Bill Clinton and Tony Blair:

AUSA Sassoon: Did you have a dinner with Bill Clinton and Tony Blair?
SBF: Something like a dinner.
AUSA Sassoon: You had invited them, after meeting Bill Clinton through Michael Kives?
SBF: Yes.
AUSA: Play GX 1559 [Video of SBF and Clinton, Blair, etc]

AUSA Sassoon: And that was you, at the event with the Bahamas Prime Minister, Katy Perry, Bill Clinton, Tony Blair and Orlando Bloom?
SBF: Yup.
AUSA: And you allowed the Bahamas PM to withdraw his funds?
SBF: Another member of the government, I think

Source : @InnerCityPress/X.com

09:42 EST – The trial resumes

AUSA Sassoon picks up her cross-examination with SBF’s political connections in the Bahamas government:

AUSA Sassoon: When you went to the Bahamas regulator, you had cultivated a cozy relationship with the gov’t there, yes?

SBF: Some of them.
AUSA Sassoon: With prime minister Philip Davis, you talked about paying off the Bahamian national debt?
SBF: I don’t remember that.
AUSA: And the PM’s son, you helped with his job?
SBF: I talked with him

AUSA Sassoon: And you bragged that Ryan Salame was essentially a member of the Bahamian government?
SBF: I don’t remember that.
AUSA: Cue the Project Chinchilla Chatter. [Exhibit] You wrote back, His name is Ryan Salame?
SBF: I did

AUSA Sassoon: You gave the Bahamas Prime Minister floor side seats at the Miami Heat Arena?
SBF: I don’t remember that.
AUSA: Here’s a message where you say he is in FTX’s court side seats with his wife.

Source : @InnerCityPress/X.com

October 30 – Day 15: SBF continues his testimony, should be cross-examined later today.

16:25 EST

The prosecution suggests breaking there, estimating another 2 hours of cross-examination. If today is any indication, the remaining two hours will be a bloodbath the defense will have a hard time coming back from.

16:07 EST

AUSA Sassoon is not holding anything back to show how dishonest he is:

AUSA Sassoon: At the time Alameda was repaying its debts, you told Caroline to pay the lenders?
SBF: Yes.
AUSA: You knew it put the FTX exchange at risk?
SBF: No, I didn’t. I did not at that time think that the odds of that were significant.

AUSA Sassoon: You knew that there was a risk?
SBF: There’s always a risk.
AUSA: Taking money from FTX to pay back lenders, that’s not margin trading, is it?
SBF: I’m not sure I agree.
AUSA: You understood there was a risk of a hole?
SBF: There could become a hole

AUSA Sassoon: You knew that Alameda could not pay, right?
SBF: I knew around then. I cannot remember the exact sequence.
AUSA: OK, let’s go to the spreadsheets. Which one did you see?
SBF: Alt 7. Not the main one

AUSA Sassoon: Do you recall receiving 8 tabs from Caroline?
SBF: I’m not sure
AUSA: Multiple tabs?
SBF: There may have been
AUSA: You know the prosecution had Google meta data showing you accessed this 8 alternative spreadsheet?
Cohen: Objection!
Judge: Overruled

Source : @InnerCityPress/X.com

15:49 EST

The prosecution yet again brings up a document SBF signed but does not recognize, with regards to the Robinhood shares he bought with a loan from Alameda and tried to get back to pay for his defense:

SBF: No.
AUSA Sassoon: Do you recognize this affidavit that you signed?
SBF: No.
AUSA: You filed it without reading it?
SBF: No, I’m reading it now.
AUSA: Let me know if you want me to change the page.
SBF: Yes, I’ve read it.

AUSA Sassoon: You’re saying you own the Robinhood shares?
SBF: At the time.
AUSA: When you filed this, many customers could not access their funds?
SBF’s Cohen: Objection!
AUSA: Can I proffer the relevance?

Judge Kaplan: Overruled.
AUSA Sassoon: You were aware customers could not access their funds?
SBF: I was aware.
AUSA: You considered calling the Robinhood broker to give you the shares without thinking about it?
SBF: I didn’t consider that
AUSA: Gx 2556

Source : @InnerCityPress/X.com

15:41 EST

AUSA Sassoon now switches gears to talk about the lavish spending:

AUSA Sassoon: It was your decision to buy out Binance’s equity stake in FTX for $2 billion, right?
SBX: Yes.
AUSA: Genesis Digital Assets, the crypto mining company, you thought the investment was worthwhile, right?
SBX: Yes, if it was properly hedged.

AUSA Sassoon: Did you buy out Storybook Brawl for $20-some million?
SBF: Yes.
AUSA: Didn’t you buy an apartment to the CEO of The Block in the Bahamas?
SBF: I don’t remember…
AUSA: Do you recall financing it?
SBF’s Cohen: Asked and answered!

AUSA Sassoon: You directed the investment in Modulo Capital?
SBF: Yes I think that’s effectively correct
AUSA: You directed the investment in K5?
SBF: I directed AN investment, not necessarily this one
AUSA: And it was your decision to investment in Robinhood?
SBF: Yes

Source : @InnerCityPress/X.com

15:24 EST

They are back from the afternoon break. AUSA Sassoon has approximately an hour left on the clock. No matter what impression Friday’s testimony may have left in the jury’s mind, all the efforts have probably been erased by today’s cross-examination:

AUSA Sassoon: Did you disclose to your customers that the risk engine had been exploited?
SBF: I can explain if you want.
AUSA: That’s alright. This incident in April 2021, then you raised money from VC firms, and publicized it, right?
SBF: Right.

AUSA Sassoon: Nishad told you he’d gotten revenue above $1 billion – you testified you were surprised, yes?
SBF: That’s right.
AUSA: You sent out FTX stat sheets, right?
SBF: Yes.
AUSA: If we go to this data tab, this is a breakdown of revenue, yes?
SBF: Right

AUSA Sassoon: There’s no column for staking revenue, correct?
SBF: I don’t obviously see one here. There’s another things I don’t see.
AUSA: But here you claim revenue above $1 billion for 2021, right?
SBF’s lawyer Cohen: Objection!
Judge Kapan: Overruled.
SBF: Yes.

Source : @InnerCityPress/X.com

14:23 EST

AUSA Sassoon is catching him in another lie:

AUSA: Is it your testimony that you did not look into the change to the code?
SBF: Yes.

AUSA Sassoon: It’s your testimony on October 24, 2022 you never looked in the database?
SBF: Someone may have set up an account in my name. But I never looked at it.
AUSA: Didn’t you try to restore your access to the AWS database?
SBF: Not personally

AUSA Sassoon: Yes or no, did you seek to restore your access to the AWS access?
SBF: I don’t know what you are asking about here.
Judge Kaplan: Look, just answer the questions.
AUSA: You were trying to get AWS database access?
SBF: Yes.

Source : @InnerCityPress/X.com

13:56 EST

They are back from lunch, at the pace AUSA Sassoon is going with her cross-examination, she should be able to finish today. To each question SBF answers with something akin to “I don’t remember”, she uses an exhibit to refresh his memory:

AUSA Sassoon: You said you didn’t cut your hair because you are lazy?
SBF: Sounds about right.
AUSA: GX 907. Did you deny this?
SBF: I don’t remember.
AUSA: Shorts and T-shirts, you said you wore them because they’re comfortable?
SBF: Yes.

AUSA: Didn’t you tell Anthony Scaramucci the shorts were part of your brand?
SBF: I don’t remember that
AUSA: Play the podcast. SBF’s voice: If we named our company Sh*tcoin Day Traders Inc they would reject us. No one doesn’t like research
AUSA: That was you?
SBD: Yep

AUSA Sassoon: You flew to the Super Bowl in a private jet?
SBF: I don’t recall how I got there.
AUSA: Because you flew on private jets so much?
SBF: I traveled 100 times.
AUSA: GX 1473.
[Photo of SBF sleeping on a private jet] Source : @InnerCityPress/X.com

12:45 EST

AUSA Sassoon calls for the lunch break at a critical moment in the cross-examination, just as Sam Bankman-Fried (SBF) did not deny the existence of the unlimited line of credits for Alameda Research. This leaves the jury with a significant point to ponder over the break, potentially impacting their perception of SBF’s testimony and credibility.

12:36 EST

Sam Bankman-Fried is starting to not remember how to answer:

AUSA Sassoon: Here is an email from March 2022, right?
SBF: Yes
AUSA: And it does not mention front running?
SBF: Not directly.
AUSA: You told Mr Faux when he came to the Bahamas what Alameda played by the same rules?
SBF: I don’t remember

AUSA Sassoon: Didn’t you claim in 2022 that Alameda was an entirely separate entity?
SBF: More or less.
AUSA: You called FTX a neutral piece of market infrastructure?
SBF: I don’t remember saying that. I might have.

Source : @InnerCityPress/X.com

12:24 EST

AUSA Sassoon brings up one of the numerous times SBF testified with the U.S. regulators, in which he probably had to be under oath:

AUSA Sassoon: You testified that FTX’s risk model would work well in the US?
SBF: Some aspects of it.
AUSA: GX 2583.
Judge Kaplan: For its truth?
AUSA: It’s the defendant’s own statement. And we don’t think it’s accurate.
Judge: Not for its truth, then.

Source : @InnerCityPress/X.com

12:05 EST

SBF is plainly being called out on his attempts at manipulating public opinion, while annoying the judge some more:

AUSA Sassoon: You described FTX as safe?
SBF: I’m not sure what you’re referring to.
Judge Kaplan: Mr. Bankman-Fried, it’s not what she if referring to, but what you remember.
AUSA: You said you would always allow withdrawals?
SBF: Yep.

AUSA Sassoon: On October 2022 you said the core of crypto is owning your own assets?
SBF: I don’t remember.
AUSA: Publish it, Mr. Bianco. What is the date of this tweet?
SBF: It says Oct 22, 2022
AUSA: You knew of the $8 billion liability?
SBF: That’s right

AUSA Sassoon: In October [2022] you stated publicly that customers mattered more than anything?
SBF: I may have.
AUSA: You wanted FTX customers to trust you?
SBF: That would have been ideal, yes.

AUSA Sassoon: The key principles you told Congress about, you review it, right?
SBF: Yes.
AUSA: You were involved in drafting it?
SBF: I don’t remember being involved in drafting it.
AUSA: You submitted it under oath?
SBF: Yep.

Source : @InnerCityPress/X.com

11:44 EST

AUSA Sassoon points out to some other lies and illegal acts of Sam Bankman-Fried, which includes accessing Caroline Ellison’s Google Drive, checking documents and saving her guilty plea on his own Drive.

AUSA Sassoon: You saved the transcript from Caroline Ellison’s guilty plea to your Google Drive, correct?
SBF: Yes.
AUSA: You reviewed documents from Caroline’s Google Drive?
SBF: Yes.

AUSA Sassoon: Do you agree you know how to tell a good story?
SBF: It depends on what matrix you use.
AUSA: You raised money through pitches dozens of times, yes?
SBF: I did.
AUSA: You spoke about the liquidation protocol?
SBF: Yep.

AUSA Sassoon: You made a pitch to Congress?
SBF: I testified.
AUSA: You flew to DC on a private plane?
SBF: Yep.
AUSA: You’re familiar with the phrase Crypto Twitter?
SBF: Yep.
AUSA: This included customers?
SBF: Yep.

Source : @InnerCityPress/X.com

11:35 EST

Sam Bankman-Fried did so many interviews, acting against the advice of counsel (unlike before), that he doesn’t remember who he talked to:

AUSA Sassoon: You ran what you said through a public relations filter, right?
SBF: Yes
AUSA: You did an interview with Mario Nawfal on Twitter Spaces on Dec 22, 2022?
SBF: I did a few
AUSA: You told Mario Nawful you were not involved?
SBF: I don’t remember that

AUSA: We off GX 2508 and 2508T.
Judge Kaplan: Received.
Audio plays: SBF says, I was intentionally not getting involved due to a concern about conflict of interest

AUSA Sassoon: That’s your voice, right?
SBF: Sounds like me.
AUSA: Did you speak with the Financial Times?
SBF: I don’t remember.
AUSA: GX 2503. Mr. Bankman-Fried, do you see this Dec 4, 2022 article?
SBF: Yes.

AUSA Sassoon: (reading) The FTX founder insisted he had walled himself off. Do you see that?
SBF: Yes.
AUSA: These were before you knew you had been indicted?
SBF: Yes.
AUSA: You thought your messages had been auto-deleted?
SBF: Some of them

Source : @InnerCityPress/X.com

With these few exchanges, the jury has probably forgotten anything Sam Bankman-Fried said during his testimony.

11:28 EST – Cross-examination starts

AUSA Sassoon starts SBF’s cross-examination, it will either be tedious (with a lot of “I don’t recall” or “I don’t remember”) or very straightforward:

AUSA Sassoon: Mr. Bankman-Fried, you owned 90% of Alameda?
SBF: Yes.
AUSA: Fair to say FTX and Alameda were affiliated?
SBF’s lawyer Cohen: Objection, form.
AUSA Sassoon: You were a billionaire?
SBF: Yes

AUSA Sassoon: You would not say you were not involved at all in Alameda trading?
SBF: Depends what you mean by trading.
AUSA: You were receiving information about Alameda throughout 2022?
SBF: Yes.
AUSA: You were not walled off, right?
SBF: I was not.

AUSA Sassoon: You met with Caroline Ellison and Sam Trabucco?
SBF: Yes.
AUSA: You can input on trading decisions, yes?
SBF: Yes.
AUSA: You were in a chat group called Vertex?
SBF: Yes.

AUSA Sassoon: You told Caroline when to buy certain crypto currencies, correct?
SBF: I’m not sure what you are referring to.
AUSA: Show the witness GX 1630. You, Ms. Ellison and Sam Trabucco, Jan 25, 2022 – you called Alameda “we,” right?
SBF: Yes.

AUSA Sassoon: You ordered and trade and Caroline said, Sounds good; you replied LOL.
SBF: Yep.
AUSA Sassoon: You told her to trade Japanese government bonds?
SBF: Yes.
AUSA: She sent you spreadsheets about hedging, and that’s trading, right?
SBF: Yes.

Source : @InnerCityPress/X.com

11:03 EST

Mark Cohen has concluding SBF’s testimony by trying to paint his client as a responsible man who did nothing but take responsibility and help:

Cohen: On Nov 11 you stepped down?
SBF: Yes.
Cohen: Did there come a time you spoke with journalists?
SBF: Yes.
Cohen: Why did you do that?

SBF: I wanted to explain what I knew.
Cohen: Did you speak with GMA, George Stephanopoulos?
SBF: Yes. I wanted to apologize.
Cohen: Did you speak with the Bahamas Securities Commission?
SBF: Yes. My father was there.

Cohen: Then what?
SBF: Gary and I were directed to transfer assets. I was trying to help in any way I could.
Cohen: Thank you Mr. Bankman-Fried. I have nothing further (!)
Judge Kaplan: We’ll take our morning break.

Source : @InnerCityPress/X.com

After the break, the prosecution will start SBF’s cross-examination. We all hope it will be different from last Thursday, as he mostly “didn’t recall” anything.

10:32 EST

Mark Cohen is actively trying to shift the blame on everyone else but SBF:

Cohen: Did you speak with Nishad Singh?
SBF: Yes, about his personal finances and situation

Cohen: Nishad wrote, it would help if I didn’t have debt…
SBF: I understood he wanted to get out of his own personal loans.
Cohen: What was his demeanor?
SBF: He was actively suicidal. We had a therapist on call.

Source : @InnerCityPress/X.com

10:20 EST

It is now time for SBF to shift the blame to his competitor, Changpeng ‘CZ’ Zhao, founder and CEO of Binance, and his famous Nov. 6 tweet:

Cohen: Let’s go to Nov 6. GX 874
SBF: It’s from CZ.
Cohen: He wrote, we are liquidating FTT on our books, yes?
SBF: Yes. I discussed with Caroline whether we should sent a tweet in response. Customer withdrawal grew to $1 billion on Nov 6. I was concerned

Source : @InnerCityPress/X.com

As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4

— CZ 🔶 BNB (@cz_binance) November 6, 2022

SBF: I was concerned about a run on the bank.
Cohen: What is that?
SBF: Say you have a bank —
AUSA Sassoon: Objection.
Judge Kaplan: Sustained.

Cohen: How did you respond?
SBF: Caroline sent a tweet, that we would buy FTT at $22
Cohen: Nov 7, what did you observe as to withdrawals?
SBF: They increased. On Nov 7, $4 billion of net withdrawals, 100 times an average day. We might be at a liquidity crisis

Source : @InnerCityPress/X.com

10:15 EST

Mark Cohen is finally getting to the events of November 2022:

Cohen: Let’s move to November. Gx 1047, a calendar of November 2022. What happened on the 11th?
SBF: FTX filed for bankruptcy.
Cohen: Nov 2, what happened?
SBF: The Coindesk article, they leaked an old copy of an Alameda research balance sheet

Source : @InnerCityPress/X.com

When he says “old”, the balance sheet was from June 30, of the same year, so only 4 months old. And the Summer of 2022 saw the downfall of Celsius, 3AC and Voyager.

10:02 EST

The trial only resumed less than 30 minutes ago, and SBF is already getting on the judge’s nerves for trying to tell some story rather than answering the question:

Cohen: What about Sam Trabucco?
SBF: He was on the Signal thread.
Cohen: What was said?
SBF: I remember I was trying–
Judge Kaplan: I’m sorry Mr. Bankman Fried, the question is, what did you say and what did that say.

Source : @InnerCityPress/X.com

09:54 EST

SBF’s lawyer, Mark Cohen, asks him about Alameda’s hedging, to try and put the fault on Caroline Ellison:

Cohen: Did you have discussions about hedging?
SBF: Yes. With Caroline Ellison and Sam Trabucco.
Cohen: With Ms. Ellison, where?
SBF: In the Orchid apartment study.

SBF: She agreed, said Alameda should have hedged. She offered to step down.
Cohen: How did you react?
SBF: I went point by point. On the last, I said it was her decision. On the rest, I said the focus should be on putting on the hedges.

SBF: In September, I asked her again about hedging. I asked what the scale was. She gave me that number. I told her I was glad – but that it should be a bigger number, at least twice as much. She sent me some spreadsheets.
Cohen: Any more?
SBF: She agreed

Source : @InnerCityPress/X.com

09:36 EST – The jury enters the courtroom.

Following the conversation Judge Kaplan had with both parties on Friday about scheduling, he informs the jury that they might have to come in on Friday, possibly to deliberate.

October 27 – Day 14: SBF testifies with the jury present.

16:24 EST

Judge Kaplan calls it a day. According to Mark Cohen, the testimony should be finished by Monday noon. The prosecution intends to cross-examine SBF for at least the rest of Monday before presenting a rebuttal case. The jury should start deliberating by the end of next week.

16:10 EST

Mark Cohen brings up the conversation between Nishad Singh and SBF:

Cohen: Let’s jump to August 2022. Did you have a discussion with Nishad Singh?
SBF: Yes.
Cohen: Do you remember discussion of the Korean account.
SBF: Yes.
Cohen: And did hedging come up?
SBF: Yes, with Caroline.

Cohen: Did there come a time Nishad spoke to you at the Orchid?
SBF: Yes. Nishad expressed concern about marketing, brand partnerships, K5. I told him the marketing team was a mess. I said I didn’t to greenlight certain new marketing initiatives

SBF: I told him other initiatives were succeeding, like the MLB umpire patch
Cohen: How did Nishad seem to you?
SBF: I experienced Nishad as nervous and halting.

Source : @InnerCityPress/X.com

15:40 EST

It’s time for the $8 billion bug to make its appearance:

Cohen: What had you planned that day?
SBF: To fly to DC and meet with Senators and their staffers about a cryptocurrency bill. I put it off.
Cohen: Then what?
SBF: Nishad said there had been an $8 billion bug.

SBF: I told them to fix the bug and the system underlying it. I thought it could not have been very robust if it had allowed the bug.
Cohen: Was the bug fixed?
SBF: Nishad and Adam. There is a memo.

Cohen: Did Gary and Nishad discuss the size of the liability.
SBF: Well, what I can say is-
Judge: Just answer the question.
SBF: I don’t recall that.
Cohen: When Alameda’s liabilities came up again, what did you do?
SBF: I looked to Paper Bird.

Source : @InnerCityPress/X.com

Paper Bird owned 75% of FTX Trading Ltd.

15:23 EST

Mark Cohen finally gets to Spring 2022 when Terra collapsed:

Cohen: What happened to Alameda in May 2022?
SBF: Net asset value fell from $40 billion to $10 billion by June 2022.
Cohen : Did you discuss hedging with Caroline Ellison?
SBF: Yes.

Cohen: What did you say to her?
SBF: Alameda had assets of-
AUSA: Objection.
Judge Kaplan: The answer is stricken. It just, what did he say.
Cohen: What was the substance of what you said?
SBF: They had not hedged, as of June 2022.

Cohen: Who else did you tell?
SBF: Ramnik, Ben and Sam Trabucco, on his way out.
Cohen: The conversation about the mining firm, whom did you speak with?
SBF: Ramnik and Caroline. I suggested Alameda put on a $2 billion hedge.
Cohen: Did they?
SBF: No

SBF: Caroline approached us in the hut and said she thought Alameda had nearly gone bankrupt. I was surpised.
Cohen: How would you describe her demeanor?
SBF: She was nervous.

Source : @InnerCityPress/X.com

14:22 EST

Thanks to his (numerous) political donations made with customer funds (allegedly), SBF was invited to talk with the U.S. lawmakers:

Cohen: Did you testify to Congress?
SBF: Late 2021, and early 2022 and one in late Spring early Summer of 2022. The House Financial Services Committee invited me. I declined. They invited more strongly and I accepted. Then Agriculture, about the CFTC.

Source : @InnerCityPress/X.com

14:12 EST

They are now getting into the celebrities connections and political donations:

Cohen: Who is in this photo:
SBF: Katy Perry, Michael Kives, Kate Hudson and me. We were running a Super Bowl ad.
Cohen: When had you met Michael Kives?
SBF: It was Kives’ and I had been wandering the stadium, I ran into them and they invited me in.

Cohen: Did you invest in Kives’ K5?
SBF: Yes. I thought they had promising incubations. And celebrity contacts.
Cohen: Did you want to contribute to candidates?
SBF: Yes. In 2020, then more in 2021 and 2022.
Cohen: Why?
SBF: I thought I could impact the world.

SBF: I was interested in pandemic prevention. So I thought policy was important, Congress and the Executive Branch. Some were by FTX for crypto currency lobbying – some, not most.
Cohen: The crypto lobbying was for?
SBF: A US regulatory structure

Cohen: Who else made donations?
SBF: Nishad and Ryan Salame.
Cohen: Did you discuss them with Mr. Salame [he pronounces it Salaam]?
SBF: No.
Cohen: Your donations were from?
SBF: Loans from Alameda research.

Source : @InnerCityPress/X.com

So apparently, the political donations from Nishad Singh were voluntary.

13:55 EST

FTX, before its collapse, was famous for its marketing, sponsorships and investments into certain projects:

Cohen: Let’s talk about marketing. What was your approach?
SBF: I had no background. But as we grew, I thought about it. I was suspect of Facebook and Google ads. I thought brand marketing would be better.
Cohen: Miami Dade Arena – how did that come about?

SBX: Names of stadium in America, they are widely known. I as an average level sports fan could name them, even if I’d never been. I would watch Dak Prescott and Sleep Number Bed, no one remembered it.

SBF: There were four available: Miami… the Kansas City Chiefs and New Orleans Saints, they were in discussions. As to the Kansas City Royals, I did not want FTX to be known as the Kansas City Royals of crypto exchanges.

Cohen: You mentioned venture investing?
SBF: Early stage projects-
Cohen: Explain
SBF: Not yet mature, something like a start up.
Cohen: Did you do due diligence?
SBF: Yes

SBF: Me, Ramnik [Arora] and Amy.
Cohen: Did you do due diligence on Solana?
SBF: Yes, I came away from my calls-
AUSA Sassoon: Objection, hearsay.
Judge Kaplan: Don’t say what anyone else said.
SBF: I ended up thinking-
AUSA: Objection.
SBUF: I invested in Solana

Source : @InnerCityPress/X.com

13:30 EST

We are now moving to the Bahamas part of the story, including of course the $30-million penthouse:

Cohen: Why did you leave Hong Kong?
SBF: Again, regulation didn’t move forward. Also, domestic issues. COVID quarantines, we could do job interviews. Also, domestic, uh, disputes with China

Cohen: Where did you go?
SBF: Bahamas. They had regulation we found suitable. I traveled there in 2021 and agreed. I lived in Albany, an apartment and vacation complex.
Cohen: How many people did you live with?
SBF: We moved into an apartment for 10 of us.

Cohen: Who was there?
SBF: Caroline Ellison, Adam & Andrea, Gary & Sheryl, Nishad & Claire, Ross and “Leila” (sp).

Source : @InnerCityPress/X.com

12:24 EST

The elusive Sam Trabucco is brought up by the defense:

Cohen: Who was Sam Trabucco?
SBF: Co-CEO of Alameda.
Cohen: What kind of hours were you working?
SBF: On a light day, 12 hours. On a hard day, 22 hours. I took of a day every few months. I had like 60,000 unread messages.

Cohen: How many Signal channels were you on?
SBF: A few hundred, I think.
Cohen: Did the growth of FTX impact your relationship with Alameda?
SBF: I had to stop being CEO. But I was still involved in ventures. I turned it over to Caroline Ellison and Sam Trabucco

SBF: They were capable people, a good team. They were they best that I had. Caroline was a good manager, empathetic. She was not a software developer. She was good at doing research. She had not focused on risk management…

Cohen: Did Trabucco step away?
SBF: Yes, toward what was effectively an early retirement. I suggested a new co-CEO but Caroline said no.

Source : @InnerCityPress/X.com

The defense is apparently playing for time, hoping to delay the cross-examination on Monday. That way, the jurors would see the “better” side of SBF. Judge Kaplan, wanting to speed things along, gives the jury and court a single hour for lunch.

11:24 EST

Mark Cohen leads SBF to tell the court and jurors his side of the story on the “Allow Negative” code Nishad Singh put in place:

Cohen: And the risk waterfall?
SBF: If an account went negative, we’d start selling off- but if late, we had backstop liquidity

SBF: We increased the number of servers, for the risk engine. But we learned that if there was an erroneous liquidation of Alameda, or any other large account —
AUSA Sassoon: Objection!
Judge Kaplan: Finish your answer.
SBF: It would be catastrophic for FTX

SBF: So I told Gary, we have to stop such liquidations of Alameda’s account. They told me they’d done it. Now I know it was the “Allow Negative.”
Cohen: Tell me about the line of credit of Alameda.
SBF: It grew over time to billions

Cohen: Did there come a time that you had a discussion with Gary and Nishad about Alameda–
AUSA Sassoon: Objection, leading.
Judge Kaplan: Sustained.
Cohen: Did you have a discussion? If so, with who?
SBF: Gary and Nishad. We increased the line of credit.

Source : @InnerCityPress/X.com

11:07 EST

After a break to sort out some issues about blog posts, the jurors return to hear the ongoing tale of how Alameda and FTX worked :

Cohen: Why did you like Hong Kong?
SBF: Better regulatory environment.
Cohen: How did you get customers?
SBF: We asked our friends, we made improvements, word of mouth. It spread organically through social media, we interacted there

Cohen: What about support tickets?
SBF: I tried to answer some of them. Well, a handful.
Cohen: Once FTX was up and running, did it have any relations with Alameda?
SBF: Yes. Alameda was a market maker.

Source : @InnerCityPress/X.com

10:18 EST

Mark Cohen is getting into how Alameda was founded:

Cohen: How were you compensated?
SBF: I had a $200,000 a year salary. Then we hired Caroline Ellison
Cohen: How did you know Nishad Singh?
SBF: He was a good friend of my brother. I didn’t know him at well. He was working at Facebook. Some there were sharp devs

SBF: We were making 50 to 100 percent profit, annualized.
Cohen: Then where?
SBF: We moved to Hong Kong. I went to a conference there. I had many useful meetings there. I rented a WeWork there. Gary and then Nishad came there. We started FTX…

Source : @InnerCityPress/X.com

10:08 EST – How Alameda came to be

Sam Bankman-Fried, a trader who knew nothing about crypto, thought it would be a good way to make money:

Cohen: Did anyone else come with you to Alameda?
SBF: Yes. Caroline Ellison, Adam Yedidia and others.
Cohen: Why did you start Alameda?
SBF: Crypto was getting public- in 2017, I’d see two people talking excitedly and it was probably about crypto. There was demand

SBF: Crypto seemed like a place with a big demand for an arbitrage provider.
Cohen: What did you know about crypto?
SBF: Basically nothing.
Cohen: Where did you borrow from for Alameda:
SBF: Genesis, Celsius, BlockFi, Voyager…

Cohen: Where was Alameda’s first office?
SBF: An Airbnb in North Berkeley, California. With a lot of Amazon boxes in it, we had to deal with that…
Cohen: Why was it called Alameda?
SBF: Berkeley is in Alameda County. We wanted to be under the radar.

SBF: I didn’t want to call it Sam’s Crypto Trading Firm. Our internal name was Wireless Mouse.
Cohen: Who else was in the Airbnb?
SBF: Myself, Gary Wang —
Cohen: Why did you invite Gary Wang?
SBF: I trusted him. He was a brilliant developer

Source : @InnerCityPress/X.com

09:56 EST

SBF takes the stand to start his testimony. Hopefully, he remembered a few things from his time at FTX and Alameda, apart from being made to sign papers blindly by his lawyer. Mark Cohen asks him to give a bit of background on how FTX came to be.

SBF’s lawyer Cohen: The defense calls Mr. Sam Bankman-Fried…. Good morning. What did FTX stand for?
SBF: Futures Exchange. We thought we could build the best product on the market.

Cohen: Did it work out that way?
SBF: No. FTX declared bankruptcy A lot of people got hurt.
Cohen: Did you defraud anyone?
SBF: No.

Cohen: With whom did you live in college?
SBF: Gary Wang, Adam Yedidia and others.
Cohen: Then where did you work?
SBF: Jane Street. It was not a high frequency trading shop.
Cohen: Did they tell you not to engage in front running?
SBF: Yes.

Source : @InnerCityPress/X.com

09:40 EST – The trial resumes

Yesterday, the Judge made SBF testify on a few subjects he wasn’t sure needed to be heard by the jurors. However, despite being painted as a genius before the collapse of FTX, he seemed to have forgotten a lot of things, annoying both the prosecution and the judge.

October 26 – Day 13: The trial resumes, and SBF should testify starting today.

15:54 EST

The prosecutor switches to North Dimension, but there is a lot of things Sam Bankman-Fried doesn’t recall, except for the fact the Daniel Friedberg was there to direct him:

AUSA: North Dimension, why did you incorporate it?
SBF: Dan Friedberg

AUSA: What was the relationship between you and Dan Friedberg?
SBF: It changed over time. Can you zoom in?
AUSA: OK, North Dimension.
SBF: I don’t recall giving him direction.
AUSA: Why was it called North Dimension?
SBF: I don’t recall

AUSA: Why did FTX transition from a bank account with Alameda in its name to North Dimension- did you think banks wanted to avoid crypto hedge funds?
SBF: Something like that
AUSA: As CEO of Alameda you didn’t know why it moved deposits to North Dimension?
SBF: No

AUSA: Did you discuss the bank account with Dan Friedberg?
SBF: I’m not sure, I just don’t recall.
AUSA: You weren’t involved in deciding on North Dimension?
SBF: Not in particular. I may have been in conversations.

Judge Kaplan: So you don’t remember specifically, is that it?
SBF: I want to make sure I’m answering the right question
Judge Kaplan: The permissibility of using North Dimension to take funds.
SBF: Only if you count Alameda.
Judge Kaplan: Listen and answer directly

Source : @InnerCityPress/X.com

15:42 EST

$13 billion missing isn’t something one would forget, but apparently it was not enough for SBF to remember.

AUSA: Did you have discussions about a $13 billion hole?
SBF: I don’t recall such conversations.
AUSA: You think it should be preserved?
SBF: It depends.
AUSA: Adam Yedidia quoted you that preserving Signals would be all downside
SBF: I don’t recall that.

Source : @InnerCityPress/X.com

He would however remember what the lawyers told him to do with the Signal messages:

AUSA: Did FTX get a subpoena, to not destroy documents?
SBF: Yes.
AUSA: Did you ask lawyers which Signals you should preserve?
SBF: Yes. Ryne Miller and Dan Friedberg

AUSA: Who decided which to retain?
SBF: Ultimately Dan and Ryne.
AUSA: Did you tell them you were discussing company business on Signal chats?
SBF: Yes. AUSA: What did they tell you?
SBF: Preserve only formal business decisions.

AUSA: They used that phrase?
SBF: I don’t recall them using that phrase.
AUSA: Did anyone use the words informal business conversations and say that spreadsheets qualified?
SBF: They were aware that would sometimes happen

Source : @InnerCityPress/X.com

15:32 EST

AUSA Sassoon is focusing on the auto-delete messages:

AUSA Sasoon: How was retention period decided on?
SBF: My time period was not meant to be the policy company wide for documents.
AUSA: Did any lawyer tell you you could delete your messages with Caroline Ellison, Gary Wang and Nishad Singh?
SBF: Not specifically

SBF: I apologize, I wish I had that policy now. My memory…
AUSA Sassoon: Do you consider Caroline Ellison’s seven spread sheets a formal document?
SBF’s lawyer Cohen: Objection! Beyond the scope of this hearing!
Judge Kaplan: Overruled

AUSA Sassoon: So you believe that deleting the message with the seven different spreadsheets was permissible?
SBF: Yes. For example, verbal discussions were not required to be reported.
AUSA: You were the CEO of FTX? and she of Alameda?
SBF: Yes

AUSA Sassoon: And you think deleting such messages was permissible?
SBF: I don’t have the policy in front of me right now.
AUSA: What about discussions of shutting down Alameda?
SBF: I wouldn’t characterize it that way.

Source : @InnerCityPress/X.com

15:25 EST

Assistant U.S. Attorney Sassoon is proceeding with her cross-examination of the few subjects mentioned before. It should be quick, as this hearing is meant for the Judge to decide which of the aforementioned subjects can be talked about in front of the jury.

AUSA Sassoon: Mr. Bankman-Fried I want to ask you about Signal. Did you discuss your use with lawyers?
SBF: Yes. In 2020. There were lawyers in the Signal chats – Dan Friedberg was on the chats.
AUSA: And auto-deletion?
SBF: Yes

AUSA Sassoon: When did you discuss auto-deletion with them?
SBF: I’m not sure if you’re referring to… Shortly after I started using Signal.
AUSA: When did you start auto-deleting? 2021?
SBF: That sounds plausible.

SBF: At some point I remember changing my toggle to one week auto delete.
AUSA Sassoon: Did you seek approval?
SBF: No.
AUSA: When did the document retention policy go into effect?
SBF: Mid 2021. Under Dan Friedberg

AUSA Sassoon: Did the policy deal with auto-deletion on Signal?
SBF: Not on Signal specifically.
AUSA Sassoon: When did it say you could destroy company records?
SBF: There was permissibility–
Judge Kaplan: Meaning you could do whatever you wanted?

Source : @InnerCityPress/X.com

14:51 EST

After a few questions about the Terms of Service (written by Dan Friedberg and Fenwick & West of course), it’s now time to talk about customer deposits:

Cohen: Let’s more to another topic. Omnibus wallets?
SBF: We put all the customers’ net bitcoins, for example.
Cohen: You got into the crypto industry in 2017?
SBF: Yes

Judge Kaplan: Mr. Cohen, we need to know the basis of the witness’ knowledge.
Cohen: How did you know that other exchanges used omnibus wallets?
SBF: I tracked my trading on other exchanges.

Cohen: The larger exchanges used omnibus wallets?
SBF: Yes. Cohen: One more topic. The Bahamas regulator, yes or no, did you attend the meeting?
SBF: Yes. With my father and Krystal Rolle… Gary Wang was in the building but not in the meeting.

Source : @InnerCityPress/X.com

14:27 EST

“The lawyer made me do it”. It is not surprising that Judge Kaplan decided it would be better for the jury not to be present to hear this. The “Advice-of-counsel” was not to be used in the defense’s opening statement, but it would seem it is all they have:

Judge Kaplan: One question is, Where is this policy? But let’s move on.
Cohen: Tell me about North Dimension.
SBF: Alameda set it up in 2020.
Cohen: How?
SBF: Dan Friedberg gave me papers to sign and I did

Cohen: Why did you sign for both FTX and Alameda?
SBF: I was CEO of both at that time. FTX didn’t have a bank account.
Cohen: Did you believe taking FTX deposits through Alameda was legal?
SBF: I did

Cohen: So what is this?
SBF: The application to Silvergate Bank for the North Dimension bank account.
Cohen: Who signed it?
SBF: Dan Friedberg.
Cohen: Let’s move to venture investments. Where did the funds come from?
SBF: Alameda Research

Source : @InnerCityPress/X.com

14:15 EST

It did not take long for SBF to blame the lawyers:

Cohen: Tell me about document retention.
SBF: Our Dan Friedberg worked on it, and Fenwick & West where he used to work.
Cohen: What could participants do with messages?
SBF: For informal chatter on Signal, they could be set on auto-delete

Judge Kaplan: This could be more helpful to me if it were more specific.
Cohen: Did you act in accordance with the policy?
SBF: To my knowledge, Yes.
Cohen: When you put on auto-delete?
SBF: Those were not channels for decisions

Source : @InnerCityPress/X.com

14:04 EST

Judge Kaplan sends the jury home for SBF’s hearing. He now takes the stand:

Cohen: What communications platforms did FTX use?
SBF: Telegram, Slack and Signal.
Cohen: What is Signal?
SBF: It was not saved by any host.
Cohen: Was encryption important to FTX?
SBF: Yes, we were hacked. So data would be vulnerable

SBF: We were headquartered in Hong Kong. There were some, uh, security concerns while we were there. Also, former employees might have data to sell to a competitor.
Cohen: Did FTX get hacked?
SBF: Never a core breach. But third parties were hacked

Source : @InnerCityPress/X.com

12:06 EST

Pimbley’s testimony continues:

They’re back.
SBF’s lawyer Everdell: DX 519. What is it?
Pimbley: My pie chart. Spot margin enabled, spot margin not enabled.
SBF’s lawyer: What was the date?
Pimbley: The snapshot date in November 2022.

Cross:
AUSA: You did not interview Mr. Bankman-Fried?
Pimbley: No.
AUSA: So you don’t know what was in his head when he ran FTX and Alameda?
SBF’s lawyer: Objection!
Judge Kaplan: Overruled.
Pimbley: I don’t know that.

AUSA: So you know nothing about this case?
Pimbley: I’ve seen a few headlines.
AUSA: There’s no crypto in the database?
Pimbley: I don’t know that.
AUSA: It’s not a bank, it does not hold funds?
Pimbley: As far as I know.

AUSA: You didn’t look at what was actually in the bank accounts?
Pimbley: I did not.
AUSA: You did not engage in any financial tracing, right?
Pimbley. No, I did not.
AUSA: You did not consider whether the funds were used to buy real estate?
Pimbley: I did not

AUSA: Your table does not address “Allow Negative”?
Pimbley: It does not.
AUSA: Did you review what Gary Wang has said about why particular accounts were included?
Pimbley: No.
AUSA: Fiat [at] FTX was not included in your chart?
Pimbley: It was not

Source : @InnerCityPress/X.com

It is the prosecution’s turn to annoy Judge Kaplan:

AUSA: Your pie chart, it’s as of November 11, 2022?
Pimbley: Yes. AUSA: Let’s go over this again —
Judge Kaplan: No. When I worked in my family’s deli, if I was asked to count how much smoked fish was sold, my number did not include pastrami. Let’s move on

AUSA: You did not evaluate how much —
Judge Kaplan: It’s getting to be time to wrap it up.
AUSA: Nothing further.
Judge Kaplan: Mr Everdell?
SBF’s lawyer Everdell: Nothing, your Honor.
Judge Kaplan: Jurors, we’ll resume at 2 pm. Counsel, remain

Source : @InnerCityPress/X.com

The defense’s witnesses are done, all that is left is for Sam Bankman-Fried to testify.

11:14 EST

The defense calls its key witness, Joseph Pimbley, to the stand. His testimony is supposed to challenge those of Nishad Singh, Gary Wang and Caroline Ellison with regards to the credit line claims.

SBF’s lawyer: Can you craft SQL queries?
Pimbley: Yes.
SBF’s lawyer: What is your connection to this case?
Pimbley: I was hired to extract data from the database on AWS.
SBF’s lawyer: What is your hourly rate?
Pimbley: $720 an hour. I’ve spend 70 hours so far.

SBF’s lawyer: How many people were in FTX’s AWS database?
Pimbley: Nine to 11 million people.
SBF’s lawyer: What else did you query?
Pimbley: The size of Alameda’s credit line. My colleague wrote the query.

SBF’s lawyer: Let’s look at the graph. How much of the line of credit was Alameda using?
Pimbley: Here, 1 billion. Here, 3 billion.
Judge Kaplan: We’ll take a 15 minute break, folks.

Source : @InnerCityPress/X.com

10:47 EST

Judge Kaplan called a recess to review documents provided by the defense with regards to the Bahamas witness, Ms. Krystal Rolle, who acted as counsel to SBF in the early days of the FTX debacle in November 2022.

He’s back. Judge Kaplan: The unredacted version of Court Exhibit I need not be produced. The redactions are sustained. Bring the jury back.
SBF’s lawyer: The defense calls Ms. Krystal Rolle. Where do you live?
Rolle: In the Bahamas. I am an attorney

SBF’s lawyer: Are you a King’s counsel?
Rolle: I was initially a Queen’s counsel. I became a King’s counsel when she passed.
SBF’s lawyer: Did you represent Mr. Bankman-Fried?
Rolle: Starting on Nov 12, 2022 to accompany him to the regulators’ office.

SBF’s lawyer: When did the interview begin?
Rolle: Noon. Mr. Joseph Bankman-Fried was there for the interview, but not for our post-interview trip to the FTX offices. There, the Commissioner said she had an order to turn over the FTX assets

SBF’s lawyer: How did you receive the order:
Rolle: It was read to me, and shown to me on a laptop that Saturday. On Monday I got it in writing.
SBF’s lawyer: I show you the order.
Judge Kaplan: Can we get to the point?

Source : @InnerCityPress/X.com

Once again, Judge Kaplan shows his annoyance in a not-so-subtle way.

Rolle: It was to transfer all the assets. And we did so, to the wallets they’d set up, until 2 in the morning. We offered to have Mr. Bankman-Fried be interviewed the following week. He turned over his passport. Mr. Gary Wang’s too.

SBF’s lawyer: Did you witness his interaction with the provision liquidator?
Rolle: Yes. There was questioning.
SBF’s lawyer: Nothing further.
Judge Kaplan: Any cross?
AUSA Roos: Just briefly.

AUSA Roos: Did you walk with the defense lawyers before this testimony?
Rolle: Yes. Most recently this morning.
AUSA Roos: And you weren’t doing anything wrong?
SBF’s lawyer: Objection! Judge Kaplan: Sustained as to form.
AUSA: Did you think it was wrong?
Rolle: No

Source : @InnerCityPress/X.com

10:10 EST

The prosecution has called forth all of its witnesses and presented all of its evidence. SBF’s lawyer Mark Cohen enters a Rule 29 motion.

Rule 29 allows for the defense to ask for a dismissal of charges on the basis of insufficient evidence. In this case, Mr. Cohen is moving for the dismissal of the wire fraud charges and money laundering.

As expected however, the prosecution refuses, and so does the Judge. It’s up to the defense to introduce their two witnesses, before SBF himself takes the stand :

Judge Kaplan: The motion is denied. Will there be a defense case?
SBF’s lawyer: Yes.

SBF’s lawyer: Two witnesses – and then Mr. Bankman-Fried. The first two should be 15 minutes each.
Judge Kaplan: I received the relatively lengthy defense letter.
SBF’s lawyer: I think Mr. Bankman-Fried’s testimony will take about four hours before those issues

Source : @InnerCityPress/X.com

Judge Kaplan is referring to the letter in which Mark Cohen detailed his wish to use the “advice of counsel” defense, in an effort to shift the blame on bad counsel.

09:53 EST – SBF’s lawyer cross-examines FBI Agent Troiano

SBF’s lawyer: You didn’t work on this case, did you, Agent Troiano?
Troiano: I did not.
SBF’s lawyer: You didn’t create this summary document 1083?
Troiano: No I didn’t.
Troiano: It was created by the prosecutors, and they sent it to you, right?
Troiano: Yes.

SBF’s lawyer: And if there were edits, the prosecutors would do that?
AUSA Kudla: Objection!
Judge Kaplan: What’s the objection?
AUSA Kudla: We can do it at a sidebar.
[Whispered sidebar ensues]

SBF’s lawyer: What is Signal?
Agent Troiano: A secure messaging app.
SBF’s lawyer: GX 1083. There are 325 Signal groups?
Agent: Yes. SBF’s lawyer: And there’s a notation for when the auto-delete function was turned off?
Judge Kaplan: Mr. Everdell, it’s a chart.

Source : @InnerCityPress/X.com

The trial has resumed after a 6 day-break, and Judge Kaplan is already annoyed with SBF’s lawyer Mr. Everdell:

SBF’s lawyer Everdell: I’ll move on to another topic. Do you see the auto-delete column?
AUSA Kudla: Objection – asked and answered.
Judge Kaplan: Sustained. Mr. Everdell, this is not helpful. This is not an exam for new eyeglasses.

SBF’s lawyer Everdell: I wanted to ask him if he knows who Ryne Miller is.
Judge Kaplan: You can ask him who Johnny Podres was.
SBF’s Everdell: Yes your Honor.
Judge Kaplan: He was a pitcher for the Brooklyn Dodgers.
SBF’s Everdell: Nothing further

Source : @InnerCityPress/X.com

09:37 EST – FBI Agent Troiano takes the stand.

Assistant U.S. Attorney Danielle Kudla will be asking the questions to the witness :

Witness: My name is Mark Troiano.
AUSA Kudla: We offer these additional exhibits… 315, 331, 322, 322a, 331, 348, 349, 449, 494, 495, 544, 766, 933, 1320a, and S2005.
AUSA: Where do you work?
Troiano: The FBI

Agent Troiano: I reviewed Signal groups on the devices of Caroline Ellison and Gary Wang.
AUSA Kudla: We have an authenticity stipulation about the authenticity of electronic devices.
Judge Kaplan: Received

AUSA Kudla: GX 1083.
Agent Troiano: These are the Signal groups Sam Bankman-Fried was involved in.
AUSA: How did you identify the participants?
Agent: The names. Sometimes on the laptop and phone they were different. But I confirmed using the phone numbers.

AUSA: In 2021 and 2022 how many Signal groups was Mr. Bankman-Fried involved in?
Troiano: Over 300.
AUSA: And how many had auto-delete enabled?
Troiano: 288.
AUSA Kudla: No further questions.
Judge Kaplan: Cross examination?

Source : @InnerCityPress/X.com

October 19 – Day 12: Last trial day of the week before a 6-day break

12:55 EST

This marks the end of the third week. Due to Judge Kaplan’s schedule, the trial will resume next Thursday.

12:32 EST

The last witness of the week is called to the stand. Robert Boroujerdi, Managing Director at Third Point, a hedge fund based in New York City, explains how he was misled by Sam Bankman-Fried to invest in FTX:

AUSA Roos: Where were you in 2021?
Robert Boroujerdi: Third Point.
AUSA: For this March 2021 call, what was the data room?
Boroujerdi: Documents

AUSA Roos: Did you believe the documents?
Boroujerdi: Yes.
AUSA: Did you have a call with the defendant?
Boroujerdi: A Zoom call led by Sam. I was in my NYC apartment. FTX was in Hong Kong. We talked about the risk engine. Sam said it took out human emotion.

AUSA: Did Alameda Research come up?
Boroujerdi: Yes. Sam said he’d started it. He said they were independent.
AUSA: Did you know Alameda was exempt from the risk engine?
Boroujerdi: No. We would not have invested. There should be no preferential treatment.

AUSA Roos: Did you meet the defendant?
Boroujerdi: At a Miami event, and at Equinox Hotel in Hudson Yards, co-hosted by Circle…
AUSA Roos: And any other times in NYC?
Boroujerdi: Sam did a fireside chat at JP Morgan in midtown Manhattan… Ramnik Arora called

AUSA Roos: Did Ramnik tell you FTX had a hole?
SBF’s Cohen: Objection as to form.
Judge Kaplan: Sustained. Leading.
AUSA: Did you become aware FTX was facing financial difficulties?
Boroujerdi: I saw tweets from “a trade publication.”

Source : @InnerCityPress/X.com

12:16 EST

Cohen, in an attempt to sow doubt about the witness, asks questions in no particular order:

SBF’s Cohen: Have you heard of Signal and Slack?
Can Sun: Yes.
Cohen: Were they used by the FTX legal dep’t?
Sun: Yes. Cohen: You said Nishad Singh told you he was concerned about this loans?
Sun: He was worried about repaying
Cohen: Understood.

SBF’s Cohen: You have a non-prosecution agreement
Sun: That’s right.
SBF’s Cohen: And you could be prosecuted if you don’t tell the truth?
Sun: Yes.
Cohen: You signed this in October 2023?
Sun: Yes. Cohen: No further questions.

Re-direct
AUSA Sassoon: You signed on October 17, 2023 – did you speak with the government before that?
Sun: Yes.
AUSA: Where did you come from to testify?
Sun: Japan. I wanted to testify.

Source : @InnerCityPress/X.com

11:40 EST

SBF’s defense lawyer Mark Cohen starts his cross-examination right away with questions about the loan Can Sun received from Alameda:

SBF’s Cohen: After you took the $2.3 million loans, you got a $2.3 million bonus from FTX?
Sun: Actually I think it was $3.5 million.
SBF’s Cohen: And they were connected?
Sun: Well they were both about my employment.

SBF’s Cohen: You tried to get licensed for FTX?
Sun: Our competitors were getting fined around the world. I was supposed to help get FTX licensed.
SBF’s Cohen: Were you successful?
Sun: We got a good number of licenses

Source : @InnerCityPress/X.com

11:14 EST

Judge Kaplan calls for a 15 minute break after these latest revelations, cross-examination will start when the trial resumes. But not before Can Sun mentioned a conversation in which Nishad Singh admitted knowing about the missing funds, which apparently led to Can sun resigning:

Can Sun: Nishad called me aside at 11 pm & asked about his personal exposure, on the loans he had taken.
AUSA: What did Nishad tell you about his conversations with the defendant?
Can Sun: That he found out in late summer of 2022 and Sam told him, It is what it is

AUSA: When did you leave FTX?
Can Sun: They next day. I resigned.

Source : @InnerCityPress/X.com

10:57 EST

AUSA Sassoon is now questioning Can Sun about a conversation with Apollo Global Management, an investment manager specialized in generating retirement and investment income (just like other Pension Funds who invested in FTX). There were talks of possible investment from Apollo:

AUSA Sassoon: Let’s talk about this call with Apollo.
Can Sun: I was put on the call without much context. Ramnik was on it.

Can Sun: I asked for information and got a spreadsheet from either Sam or Ramnik. We were in an apartment in Albany, at the end of the Bahamas.
AUSA: What did you learn?
Can Sun: I was shocked – there were $7 billion missing.

AUSA: What was Nishad doing?
Can Sun: He was pale and gray.
AUSA: What did you conclude from the spreadsheet?
Can Sun: That funds had been misappropriated.
AUSA: Did you share the info with Apollo?
Can Sun: We gave them the spreadsheet.

Can Sun: Then Sam told me Apollo wanted a legal justification for the missing funds. Sam asked me to come up with one.
AUSA: Did the defendant provide any justification?
Can Sun: No. He did not tell me anything.
AUSA: Did you explore justifications?
Can Sun: None

Can Sun: Sam told me to walk with him, before he spoke with Apollo again. I told him, there are no justifications but there are some theoretical explanations.
AUSA: What were they?
Can Sun: Section 9 of our terms of service, escheatment. But it could not explain.

Can Sun: I previewed a few other theoretical explanations but told him they were not supported by the facts. He acknowledged it.
AUSA: How did he respond?
Can Sun: I expected a bigger response. But all he said was, Got it. He didn’t seem surprised

Source : @InnerCityPress/X.com

Ramnik Arora, former Goldman Sachs quant, who acted as Head of Product at FTX.

Escheatment is the process in which the state recovers assets from a dormant account.

10:46 EST

They are now discussing loans made by Alameda to SBF, in other words, loans he made to himself according to all the previous testimonies:

AUSA Sassoon: What was your view of Alameda lending money to the defendant to make investments?
Can Sun: We did not know it was customer funds.
AUSA: I have a binder incl Defense Exhibits that I am going to show the witness
Can Sun: These are loans to the founders

AUSA Sassoon: How much is this loan from Alameda to the defendant?
Can Sun: $360 million.
AUSA: Would you have documented loans that involved the use of customer funds?
SBF’s lawyer Cohen: Objection!
Judge Kaplan: I’ll allow that.
Can Sun: No

AUSA Sassoon: Now these loans for founders.
[Spreadsheet adds to over $2 billion]
AUSA: GX 141A, Alameda general ledger. Transfer to Sam Bankman-Fried of $4 million. Were you aware?
Can Sun: No.
AUSA: Did you get a loan from Alameda?
Can Sun: Yes, $2 million

AUSA: Mr. Sun, do you have an agreement with the US?
Can Sun: Yes, a non-prosecution agreement. As general counsel I was involved in transactions that may have involved the misappropriate of customer funds.
AUSA: I have 15 minutes more
Judge: Let’s get it done

Source : @InnerCityPress/X.com

10:40 EST

After discussing FTX’s terms of service, in which it was specified that FTX losses would not be covered by traders’ profits, Assistant U.S. Attorney Sassoon presents a list of investors to Can Sun:

AUSA Sassoon: Here’s a list of investors in FTX. Do you see the Ontario Teachers Pension Fund?
Can Sun: I do.
[Inner City Press also sees not only Skybridge but also the name Mark Cuban]

AUSA Sassoon: What did you tell investors about FTX’s relationship with Alameda?
SBF lawyer Cohen: Objection! Hearsay!
AUSA: Not offered for its truth.
Judge Kaplan: Overruled.
Can Sun: That they were separate.

Source : @InnerCityPress/X.com

09:40 EST

The prosecution calls Can Sun, FTX’s former General Counsel, to the stand:

AUSA Sassoon: What were you at FTX?
Sun: General Counsel.
AUSA: Did you ever approve lending FTX customer assets to Alameda?
SBF’s lawyer Cohen: Objection! Leading!
Judge Kaplan: Sustained.

AUSA Sassoon: What if anything did you approve about lending to Alameda?
SBF’s lawyer Cohen: Same objection.
Judge: Overruled Sun: I never approved loans of FTX customer funds to Alameda. It was segregated. AUSA: What was the purpose?
Sun: So not misappropriated

AUSA Sassoon: What was the defendant’s role in proposing key principles of how customer assets should be treated?
Sun: He was central, and said the assets were segregated.
AUSA: What were you saying to regulators?
Sun: That customer assets were protected

Source : @InnerCityPress/X.com

Clearly, they were not segregated, or there wouldn’t be a trial.

October 18 – Day 11

Professor Peter Easton from the University of Notre Dame took the stand as an expert witness. With conviction, he elaborated on how transactions from FTX frequently flowed into Alameda Research’s accounts. Once there, these funds were subsequently utilized for a myriad of purposes, ranging from political donations and loan repayments to high-stakes investments and real estate acquisitions.

Easton’s meticulous analysis highlighted how Alameda Research continuously used funds from FTX’s customer accounts to settle various financial commitments, despite these accounts displaying worrying and consistent deficits. His testimony was particularly damning when he disclosed,

“Out of the $11.3 billion in FTX customer funds that were supposed to be held by Alameda Research, only $2.3 billion were found in its bank accounts.”

Detailing specific transactions, Easton pointed out that, “All of the purchase of Modulo Capital was made using customer funds.” Similar patterns of fund movements were evident preceding FTX’s investments in notable entities like Genesis Digital Assets, SkyBridge Capital, banking app Dave, and AI startup Anthropic. Investments weren’t the only concern. Purchases of real estate in the Bahamas and the acquisition of Binance’s significant $2.2 billion stake were financially underpinned by what Easton emphasized were “customers on the FTX exchange.”

In addition to these fund mismanagements, the spotlight also shone on the crypto mogul’s controversial direct messages on Twitter. Direct exchanges ranged from mentions of NBA star Shaquille O’Neal to a dismissive attitude toward regulations. One message read,

“Fuck regulators. They make everything worse.”

His lax attitude was further exemplified when he admitted to a Vox reporter that he’d said “dumb shit.” The court also heard Bankman-Fried question the ethical stance of Binance CEO Changpeng Zhao, popularly known as CZ. Referring to CZ’s reputation, he remarked, “Now he’s a hero. Is it because he’s virtuous or because he had a bigger balance sheet, and so he won?” The connection between FTX and sports was also brought to light with revelations of FTX’s $750,000 payment to basketball legend Shaquille O’Neal, who is now the target of a class action lawsuit.

Political affiliations and contributions also took center stage. Funds were strategically directed through executive accounts, particularly those of Nishad Singh or Ryan Salame, before they were earmarked for political contributions. In a detailed rundown, FBI accountant Paige Owens shed light on the extensive political donations made by SBF, Singh, and Salame. These funds were channeled to various political action committees and campaign funds, drawing attention to the intricacies of their political connections.

Eliora Katz, the former director of government relations at FTX’s US division, was another pivotal witness. She touched upon potentially contradictory statements made by SBF during congressional hearings. The courtroom saw its share of drama when another witness, Cory Gaddis from Google, was quickly dismissed by Judge Kaplan for lacking the necessary expertise. Kaplan didn’t mince words, rebuking both the prosecution and the defense for what he perceived as a waste of the court’s precious time.

Amid these revelations, the defense raised once again concerns regarding SBF’s consumption of Adderall, speculating on its potential influence over his concentration and capacity to provide testimony.

The trial’s pace has been brisk, with indications that the prosecution is poised to conclude its arguments by next week. Such developments will force the defense into making pivotal decisions regarding its subsequent strategy. Earlier testimonies, particularly from key figures in SBF’s inner circle like Caroline Ellison, Gary Wang, and Nishad Singh—all of whom have pleaded guilty—depicted Bankman-Fried as the alleged mastermind behind the fraud. They described him making risky decisions even when faced with objections from close associates.

October 17 – Day 10: Nishad Singh is cross-examined by Sam Bankman-Fried’s lawyer Mark Cohen.

16:13 EST

Among the many influential figures in the United States SBF, is Bill Clinton:

Now the jury is shown Bankman-Fried’s invite to meet Bill Clinton at the Clinton Initiative meeting during (…) UN General Assembly High Level Week in September 2022 (when it was already clear where FTX was heading). Natalie on the invite again….

Source : @InnerCityPress/X.com

15:39 EST

The conversation centers around the movements of Sam Bankman-Fried in Manhattan to do a Forbes photo shoot or meet NYC Mayor Eric Adams:

AUSA Kudla: Here is an invitation to the defendant to a Forbes photo shoot in the Equinox Hotel in Hudson Yards on September 17, 2021
The invitation comes from Natalie [at] FTX

Shown to jury, a chart: the phone moving from Teterboro NJ [private jet airport that, for example, Jeffrey Epstein flew into before being arrested] and dinner in Manhattan] Then another invite from Natalie at FTX, dinner with Eric Adams at Osteria La Baia W 52 St

Now shown to jury, Ryne Miller’s tweet praising NYC Mayor Eric Adams after SBF’s dinner with him, retweeted by SBF

Source : @InnerCityPress/X.com

14:56 EST

After Singh is excused, the prosecution calls to the stand Agent Richard Busick from the Federal Bureau of Investigation. Nick Roos leaves the questions to his colleague Danielle Kudla.

Next witness: Agent Richard Busick, for cell site analysis.
AUSA Kudla: Ageny Busick, were you asked to analyze a particular cell phone?
Busick: Yes, an AT&T phone, for location in Manhattan at particular times

Source : @InnerCityPress/X.com

Judge Kaplan called a break after a long explanation of how cell towers work.

First half of the day

On the tenth day of Sam “SBF” Bankman-Fried’s criminal trial in New York, the courtroom buzzes with anticipation as the defense continues its cross-examination of Nishad Singh, a key witness and former confidant of Bankman-Fried. Singh’s relationship with the accused goes beyond professional ties; they were once friends, roommates, and colleagues.

As Mark Cohen, the lead defense attorney, probes Singh about his previous day’s testimony, the spotlight falls on Singh’s memory — or lack thereof. Cohen methodically challenges Singh’s recollection of pivotal events, particularly those from June to July 2022. At the heart of this is a software glitch that Singh claimed to have learned about only through an overheard discussion between FTX’s former CTO, Gary Wang, and developer Adam Yedidia. This bug led to an “$8 billion hole,” as described by Singh, throwing light on Alameda’s unexplained financial discrepancies.

But there’s another layer to Singh’s involvement. In earlier testimonies, Singh had admitted to his role in a campaign finance scheme, where funds from Alameda passed through his bank account for political donations. When probed by Cohen on this matter, Singh’s narratives seemed inconsistent, further emphasizing the defense’s efforts to cast doubt on his credibility.

Cohen also delves into Singh’s opinion on the luxury penthouse at the Orchid, located in the upscale Albany area of the Bahamas. This facility, where Singh, Bankman-Fried, and others resided, was opulent, befitting their billionaire and multimillionaire status. Cohen questions Singh’s assertions about the appropriateness of the penthouse’s cost, drawing attention to the residents’ affluence.

The defense’s cross-examination takes another turn as Cohen confronts Singh about Alameda’s financial practices, particularly borrowing funds. Singh’s discomfort is palpable as he expresses his disapproval of such practices, leading to an audible sigh from Cohen.

Outside the courtroom, the ongoing trial garners attention from various quarters. The legal proceedings, which revolve around fraud allegations related to FTX and Alameda, are scheduled to continue until late October. The defense and prosecution both seem geared up, with former Alameda CEO Caroline Ellison, Wang, Yedidia, and a few ex-FTX clients already having taken the stand.

October 16 – Day 9: Today marks the start of Nishad Singh’s testimony.

16:40 EST – End of the live

Judge Kaplan calls it for the day, after Singh admits he had been suicidal for a few days. The jury leaves the courtroom, and the judge asks the defense how long they will need to cross-examine the witness. The defense asks about their filing for permission to allow SBF to take Adderall at midday:

Cohen: We propose a half day tomorrow, with the rest to thrash out the medical issues.
Judge Kaplan: The new medication won’t be available until Thursday. I don’t see any evidence of a problem – I’m not a doctor.
Cohen: Then we ask to adjourn to Thursday

Judge Kaplan: I haven’t heard from a physician since August 12. I don’t have an opinion he needs it now. We’re going to proceed.
Cohen: We object.
AUSA Sassoon: BOP (Federal Bureau of Prisons) found a lower dose was medically appropriate. Their physician engaged suspect practices

AUSA Sassoon: He was prescribing Adderall to people who didn’t need it, or not at that level.
SBF’s lawyer: Don’t consider that.
Judge Kaplan: He’s in the custody of the BOP, they have doctors. I can’t write prescriptions. I can’t let lawyers come in and give drugs

Source : @InnerCityPress/X.com

16:20 EST

Roos fast-forwards to the week of the collapse:

AUSA: What happened in November 2022?
Singh: The collapse. Customer withdrawals.
AUSA: What does this mean?
Singh: I wanted to sell the FTT & SRM AUSA: Why?
Singh: I was concerned it would look really corrupt

AUSA: On November 6, did you discuss Alameda’s balances with the defendant?
Singh: Yes, he talked about how there was a hole. Sam and Caroline drafted balance sheets.
AUSA: Did you talk about the old FTX fiat account?
Singh: He reference the seoyuncharles account (an alias for Alameda’s trading subaccounts on FTX)

AUSA: On the evening of Nov 6, did you have a conversation with the defendant about Twitter?
Singh: Yes, in Sam’s Gemini 1 apartment, Ryan Salame was on the phone. We were talking about calling it solvent. I felt it was not true. I told them.
AUSA: Who?
Singh: Sam

Singh: They were talking about making the tweets strong, which I understood to mean misleading –
SBF’s lawyer: Objection!
Judge Kaplan: Overruled.
Singh: Confident and so misleading.
AUSA: I could stop here
Judge Kaplan: Go on.

Source : @InnerCityPress/X.com

15:00 EST

According to Singh, Sam Bankman-Fried, his brother Gabriel and Ryan Salame had access to one of his accounts in order to make political donations in Singh’s name.

Singh: Then they used my Wells Fargo account. They asked if they could use me to make contributions to many Democratic candidates. I agreed.
Judge Kaplan: What is At Blue?
Singh: A platform to make donations to Democrats. I was supposed to sign a lot of checks

AUSA: Where did these funds come from?
Singh: Alameda sent me FTX customers’ funds.
AUSA: Why were they made in your name?
Singh: Optics. End recipients knew they were actually coming from someone else.

On the screen: Michael Sadownsky told Singh, with you being the center left face, you’ll be making donations “to a lot of woke sh*t.”
AUSA: Was that your understanding?
Singh: Yes but without swear words. It seemed to go to LGTBQ Victory Fund but really to others

Singh: I wasn’t comfortable. So I sought others who were willing to have their names used.
AUSA: How were contributions tracked?
Singh: In 2022 Sam wanted us to fill out a form about all donations, so he could make representations about what FTX was supporting.

Source : @InnerCityPress/X.com

14:40 EST

Singh is now telling the court how he talked about this with SBF, and more importantly, how he started to worry (about time, anyone would say):. He also mentions

AUSA: How long was your conversation with the defendant on the balcony?
Singh: An hour, an hour and a half. I said, Caroline is freaked out about the NAV situation. Sam said, We are a little short on deliverables

Singh: Sam said, I was worried about this. Maybe I shouldn’t have circulated the document this morning. People are going to be freaking out… I felt betrayed, something I’d put in blood sweat and tears for five years turning out so horrible.

AUSA: Why didn’t you leave?
Singh: How could I forgive myself if my departure precipitated the end? On the balcony, Sam said he’d go to NY with Remnik, and then with Scaramucci.
AUSA: Who is Scaramucci?
Singh: I think Anthony is his first name. He was with Trump

Singh: Sam came back from the Middle East and regaled people with stories, saying it was becoming more progressive culturally. I asked to meet.
AUSA: Did you?
Singh: Yes in his apartment in Gemini. I told him, I am not feeling good about this. I thought I’d quit

Singh: Sam said, we could come out of this with another $5 billion.
AUSA: That’s not $13 billion. What else did you discuss?
Singh: I said, “we have a lot more to do”. Sam said, “I need you Nishad to take this kind of work off my plate. I was afraid”. Sam was on edge.

Source : @InnerCityPress/X.com

The trip to the Middle East must be the meeting with Saudi Crown Prince Mohammed bin Salman, where SBF tried to raise $1 billion but only got an offer for $250 million, according to Caroline Ellison’s testimony.

14:30 EST

AUSA asks about a conversation about shutting Alameda down, after he demanded Singh identify the “writing style” of Sam Bankman-Fried on a document mentioning the CFTC:

Singh: [Said before objection] Sam’s.
AUSA: Roos: Do you recall participating in a conversation about possibly shutting down Alameda?
Singh: Yes. Sam sent Gary and me a Google Doc. I read most but not all of it.

Singh: I proposed shutting down Alameda on FTX – close some illiquid markets, revamp the OTC system…
AUSA: By 2022 did Alameda need the Allow Negative feature to do market making?
Singh: Fundamentally, no.

AUSA: Did you ask Caroline Ellison about the possibility of shutting down Alameda on FTX?
Singh: Yes. She replied, That’s impossible.
AUSA: How did you respond?
Singh: I was alarmed.
AUSA: Who was on the chat?
Singh: Gary, Sam, Caroline and me.

Singh: Gary said Alameda was borrowing $13 billion from FTX. I was hoping I’d misunderstood. FTX itself didn’t have that much money.
AUSA: How did the defendant respond?
Singh: I was sitting next to him. He seemed unsurprised. He made up a false excuse for dodging

Source : @InnerCityPress/X.com

14:13 EST – Court is back in session.

12:50 EST – Judge Kaplan calls for the lunch break, the trial will resume at 14:00 EST.

12:08 EST

Singh now talks about the Alameda account and how it had been coded to allow for negative balances:

AUSA: You mentioned a bug. Can you explain?
Singh: The bug prevented the correct accounting for the Fiat [at] FTX account – the error grew to $ 8 billion… I overheard a conversation between Gary and Adam Yedidia about it

AUSA: How was it possible for Alameda to have this negative balance?
Singh: The “Allow Negative” flag.
Judge Kaplan: Just explain what a flag is – I don’t expect it’s “Don’t Tread on Me.”
Singh: It’s a yes or no. This way, it allowed a negative balance.

AUSA: When you participated in the creation of the Allow Negative feature, how did you understand it?
Singh: That it was for getting FTX back the ability to get back locked forms of FTT. I was told this the day I wrote the code, by Sam and then Gary.

AUSA: So in June 2022 when you saw Alameda negative $2.8 billion, what did you think?
Singh: It concerned me.
AUSA: What was your understanding of whether using customer funds was appropriate?
Singh: It was inappropriate.
SBF’s lawyer: Objection!
Judge: Overruled

Source : @InnerCityPress/X.com

11:40 EST

AUSA shifts from the lavish spending of influence and lifestyle (including the $30 million penthouse in the Bahamas) to the events of May 2022:

Singh: In May 2022 LUNA and UST had some sort of algorithmic failure.
Judge Kaplan: What’s that?
Singh: A failure in the design of those two tokens.
AUSA: What was the defendant saying at the time?
Singh: Sam said there was a need for raising.

Singh: He discussed acquiring large sources of capital like Celsius or BlockFi. We talked with Ramnik–
AUSA: Who’s he?
Singh: Ramnik Arora, he worked with Sam on venture capital
AUSA: In June 2022 were you involved in a project involving Alameda balances?
Singh: Yes

Source : @InnerCityPress/X.com

10:48 EST

It gets interesting, as Singh starts putting into context the lavish marketing spendings made by SBF to establish FTX as a trustworthy brand:

Singh: Sam told me that at a post Super Bowl party in LA he met the most impressive people he ever met, at Michael Kives’ house.
AUSA: Who else was on the list of attendees?
Singh: Hillary Clinton, she was a presidential candidate
SBF’s lawyer: Stipulated

Singh: Also on the attendee list of the Super Bowl party Sam talked about were Orlando Bloom, Kate Hudson, Kamala Harris’ husband, Leonardo DiCaprio

AUSA: What did you observe between the defendant and Michael Kives or Bryan Baum of K5?
Singh: I saw them in the Albany penthouse.
AUSA: GX 1451
Singh: This a photo of Katy Perry in green, Orlando Bloom in a hate, Michael Kives – and Sam.

Singh: Sam sent Gary and me a term sheet to give millions in bonus to Michael Kives & Bryan Baum, & a billion investment in their VC firm. I asked, Can we go back? Sam said, it’s basically done. I was concerned that a move K5 would share-
SBF’s lawyer: Objection!

Judge Kaplan: Is this something you just thought, or said to the defendant?
Singh: Thought and said.
Judge Kaplan: Admitted.
Singh: I asked that it be done with Sam’s money and not FTX’s money.

AUSA: Let me show you a spreadsheet of FTX deals. Do you see, FTX Arena?
Singh: Yes. $135 million. And $28 million to Steph Curry.
AUSA: Who is Steph Curry? Singh: A great basketball player.
[List also includes Kevin O’Leary, $14 million]

AUSA: And Tom Brady and Gisele Bundchen?
Singh: A quarterback and a model.
AUSA: And Larry David?
Singh: From Seinfeld…
AUSA: How much did all these deals add up to?
Singh: $1.3 billion.
Judge Kaplan: Let’s take our morning break.

Source : @InnerCityPress/X.com

Michael Kives, along with his associate Bryan Baum, are currently the target of a suit by FTX to recover $700 million in investments made by Bankman-Fried, in exchange for connections with politicians and celebrities.

10:42 EST

AUSA starts questioning in details the investments made allegedly by SBF, to establish his direct involvement in Alameda’s investments and the frauds that ensued:

Judge Kaplan: What is a blockchain?
Singh: A database of transaction that lives in a distributed manner.
AUSA: Do you see this investment in Anthropic? What is it?
Singh: An AI company focused on AI safety.

AUSA: What was the almost $500 million investment for?
Singh: It was an investment. SBF’s lawyer: Objection! No foundation!
Judge Kaplan: The answer is stricken. Please lay a foundation if you can.

AUSA: What was his involvement in the Anthropic deal?
Singh: He set it up & decided on it
AUSA: What was the investment through?
Singh: Alameda
AUSA: Let’s talk about K5. What did the defendant say?
Singh: That they were connected with celebrities & were important

Source : @InnerCityPress/X.com

10:29 EST

Singh now starts talking about the money spent by Alameda and FTX:

AUSA: How much were you worth? Singh: I was a billionaire.
AUSA: Were you given loans by the company?
Singh: Yes.
AUSA: Did you use money from the exchange to make large purchases?
Singh: Yes. And donations.

AUSA: How would you describe the defendant’s approach to spending?
Singh: Excessive.
SBF’s lawyer: Objection! Can we have a foundation?
Judge Kaplan: Sustained.
AUSA: Did you tell the defendant your view?
Singh: I learned of spending after the fact, I’d complain

Singh: I’d complain about the excess & flashiness which I found different that what we were building the company for. He’d say I didn’t understand, he was out there interacting with people. I thought we were fleeced for $20 million, he said I was sowing doubt.

Source : @InnerCityPress/X.com

10:18 EST

Singh recounts his history with the defendant, FTX and Alameda:

AUSA: When did you first meet Bankman-Fried?
Singh: I was close friends with his younger brother.
AUSA: Where’d you go to college?
Singh: UC Berkeley, then Facebook. In last 2017 I started working at Alameda Research. Sam and Gary ran it.

AUSA: What were you at Alameda? Singh: I was a software engineer.
AUSA: Did you meet Caroline Ellison?
Singh: Yes, she was a trader. Then I went to FTX. Sam and Gary were in charge.
AUSA: What did Mr. Bankman-Fried do that Gary didn’t?
Singh: Endorsement deals

AUSA: Was Gary involved in venture investments?
Singh: I don’t think so. That was Sam.
AUSA: Did you ever live with the defendant? Singh: Yes, in the Albany penthouse.
AUSA: Where?
Singh: In the Bahamas.

AUSA: How would you describe your relationship with Sam?
Singh: I’ve been intimidated-
SFB’s lawyer: Objection!
Judge Kaplan: On what ground?
SBF’s lawyer: Calls for speculation.
Judge Kaplan: Overruled
Singh: Sam is a formidable character – I came to distrust him

Source : @InnerCityPress/X.com

10:15 EST

After a quick testimony from a customer who lost between $250,000 and $280,000 on FTX, Nishad Singh is called to the stand by the prosecution. Assistant U.S. Before that, it is worth mentioning that the defense filed a request late Sunday in which they request authorization to provide their client Sam Bankman-Fried with Adderall at midday so that he can focus in court.

AUSA Roos gets right to his questions :

AUSA: Where were you working last year?
Nishad Singh: FTX. I was chief engineer.
AUSA: Did you commit crimes? Singh: Frauds… and campaign finance violations.
AUSA: Who did yo conspire with?
Singh: Sam Bankman-Fried, Caroline Ellison, Gary Wang and others

AUSA: What is venture capital? Singh: Investment money in company hoping for returns.
Judge Kaplan: How is it different from buying stock?
Singh: It’s private equity, not necessarily publicly traded.
AUSA: Do you have a cooperation agreement?
Singh: Yes.

Source : @InnerCityPress/X.com

Nishad Singh, like his former colleagues Caroline Ellison and Gary Wang, pled guilty to several charges in the weeks following the collapse of FTX, and is now subject to similar cooperation terms as they are, including a 5K letter to obtain reduced sentences. Fraud charges are each accompanied with 20-year jail sentences, and a 5K could go a long way to reduce the time spent behind bars.

October 13 – Day 8: Zac Prince, BlockFi’s Founder & CEO, comes back to the stand, having only arrived a few minutes before the end of the previous day.

12h28 EST

Judge Kaplan excuses the jurors for the day. SBF’s lawyer clearly tried his best to shit the blame to BlockFi’s current state of affairs on its inner workings and potential lack of due diligence.

SBF’s Cohen: The Robin Hood shares you mentioned, did you know who owned them?
Prince: It turns out I wasn’t aware of the nuances.
Cohen: Why did BlockFi seek a loan from FTX in the summer of 2022?
AUSA Roos: Objection! Cumulative!
Judge Kaplan: It is

SBF’s Cohen: I want to set up a question… Were you concerned BlockFi might go bankrupt?
Prince: A CEO must thing of possibilities.
Cohen: No further questions…

Source : @InnerCityPress/X.com

Zac Prince will be back to be questioned quickly by the prosecution, before they call their next important witness, Nishad Singh, FTX’s Former Director of Engineering. He pled guilty to several counts of fraud in February, and subject to a similar cooperation agreement as Ellison and Wang.

11:24 EST – Sam Bankman Fried’s lawyer, Mark Cohen, starts his cross-examination of Zac Prince.

He was handed a defeat yesterday by Caroline Ellison, failing to make her say anything other than what she had already told the prosecution and the court. After numerous comments from Judge Kaplan about undesirable repetitions, Cohen did little to get back in a rhythm, and Ellison’s cross-examination, maybe the most important of the trial, was “done”.

SBF’s Cohen: Customers could let BlockFi lend their money out, right?
Prince; Yes, if they agreed to.
Cohen: Did you consider FTX top 10%?
Prince: Top 10% how?
Cohen: Value… Security…
Judge Kaplan: Which is it?
Cohen: Reputation. Prince: It was reputable

SBF’s Cohen: Do you remember being interviewed by prosecutors during the summer? and saying “top ten percent”?
Prince: I meant that FTT at one point was top 10% by market cap.
Cohen: Fair enough.

SBF’s Cohen: Do you remember being interviewed by prosecutors during the summer? and saying “top ten percent”?
Prince: I meant that FTT at one point was top 10% by market cap.
Cohen: Fair enough.

Source: @InnerCityPress/X.com

Based off these few exchanges, we could say the situation isn’t better than the previous day’s cross.

10:41 EST

AUSA Roos shows Zac Prince a balance sheet, most probably one of the “alternative” balance sheets Caroline Ellison manufactured for Alameda’s lenders, allegedly at the request of Sam Bankman-Fried.

AUSA: Let me show you a balance sheet
Prince: Yes, it’s Alameda’s Q2 of 2022.
AUSA: Did you speak with Alameda about these financials?
Prince: Yes, with Caroline Ellison and a man named Richard Ching (sp)

AUSA: What were you told these loans were?
Prince: That they were from other crypto lenders… We also looked at what would happen in different scenarios
Judge Kaplan: So it’s like a car loan, and the bottom falls out of the market for used cars, yes?
Prince: Yes

Source: @InnerCityPress/X.com

AUSA Roos finishes taking Prince’s testimony with a bang:

AUSA Roos: If you’d known Alameda was using FTX customer money, would you have lent?
Prince: No. That is not appropriate.
AUSA: And when FTT dropped what did BlockFi do?
Prince: We called some of the loans. But there were still $650 million outstanding

Prince: They posted as collateral Greyscale Trust and Robin Hood.
AUSA: How much did BlockFi have on the FTX exchange at time of bankruptcy?
Prince: $350 million. So overall, $1.1 billion
AUSA: So BlockFi declared bankruptcy – why?
Prince: Alameda & FTX

Source: @InnerCityPress/X.com

10:14 EST

AUSA Roos and Zac prince are now talking about the events around and after the Luna collapse. As a reminder, the entire Luna ecosystem collapsed due to a depegging of the algorithmic stablecoin UST. It caused further downward pressure on the crypto market, and ultimately led to the bankruptcies of several crypto companies (3AC, Celsius, Voyager) and down the line Alameda and FTX.

But before that, an agreement was being established for FTX to acquire BlockFi.

AUSA: Did there come a time BlockFi was going to sell itself to FTX?
Prince: Yes. We decided if we could bring additional capital in to help with consumer confidence, it would be good. FTX proposed a deal, it had two parts. A $400 million credit facility

Prince: It also provided for FTX being able to acquire BlockFi in July 2023. We thought that would happen.
AUSA: Did that happen?
Prince: No.
AUSA: But did your arrangement with FTX influence loans to Alameda?
Prince: It was a data point

AUSA: Were you extending loans to Alameda because of your deal with FTX?
SBF’s lawyer Cohen: Objection! Leading!
Judge Kaplan: Sustained.
AUSA: Did BlockFi lend to Alameda in 2022?
Prince: Yes, from July to early November, $850 million of loans

Source: @InnerCityPress/X.com

9:34 EST

Assistant United States Attorney Nick Roos picks up on his questioning of Zac Prince, Founder and CEO of BlockFi. He is looking into the inner workings and procedures of the now-bankrupt crypto lender :

Jury entering! Judge Kaplan: The witness is still under oath.
AUSA Nick Roos: What was BlockFi’s process for making crypto loans?
Zac Prince: On the retail side, it had to go through KYC, Know Your Customer. They had to transfer collateral to the BlockFi platform

Prince: On the institutional side, also KYC – more thorough for business, looking at the owners – and what type of business, the financial health…
AUSA Roos: Did BlockFi ever make loans without doing due diligence?
Prince: No

Source: @InnerCityPress/X.com

AUSA goes into the heart of the matter, i.e. the loans to Alameda:

AUSA: How much was BlockFi lending out, overall?
Prince: Five to ten billion dollars.
AUSA: How much was Alameda?
Prince: At first $10 million. Then in Q2 of 2021
Judge Kaplan: Everybody knows, but what is Q2?
Prince: 2d quater, April May and June

AUSA Roos: Did you talk with Sam Bankman-Fried?
Prince: Yes, a CEO to CEO was suggested. So we did a call.
AUSA: How did it change from May 2021 to May 2022?
Prince: It increased from $50 million to $1.1 billion.

Source: @InnerCityPress/X.com

October 12 – Day 7: The defense starts Ellison’s cross-examination

Today, inside the Southern District Court of New York, tensions escalated as Caroline Ellison, former CEO of Alameda Research, continued her testimony against FTX’s founder, Sam Bankman-Fried. The atmosphere was thick with anticipation, further intensified by shocking allegations from the day before, including claims of a $150 million bribe to Chinese officials and desperate measures involving Thai identities.

Central to today’s proceedings were the strained dynamics between Ellison and Bankman-Fried, especially after their romantic relationship ended in April 2022. Ellison detailed her growing discomfort in dealing directly with Bankman-Fried, leading her to favor group meetings or communication through the Signal app. This personal turmoil was further exacerbated by her increasing disagreements over FTX’s strategic direction, bringing her close to resigning from her role at Alameda.

However, today’s courtroom dynamics took an unusual turn when the defense, led by Mr. Cohen, began their cross-examination. The repetitive nature of Cohen’s questions, often retracing points already covered by the prosecution, led to palpable tension and frequent objections. This approach did not sit well with Judge Kaplan, who expressed his frustration with the defense’s tactics. The courtroom was abuzz when Judge Kaplan voiced his astonishment at the unconventional cross-examination, stating, “Mr. Cohen, I’ve never seen the cross of a cooperator done like this.”

The contrasting views on blockchain projects, FTX’s business model, and differing risk tolerances between Ellison and Bankman-Fried were also prominently highlighted. Ellison, pivotal in providing insights into Alameda’s financial structure, defended its approach, emphasizing its flexibility over traditional hedge fund models.

After the defense was done with cross-examining, the prosecution called to the stand Christian Drappi, software engineer at Alameda, who recounted the last few days of Alameda. He mainly commented on the audio tapes played by the prosecution, from when Caroline Ellison announced to the Alameda staff in Hong Kong that they had been using FTX customer deposits. A fun moment happened when he had to explain to the court what YOLO means.

Judge Kaplan: This is for prior consistent statement.
AUSA: Who recorded the all-hands meeting?
Drappi: Rick Best. He had started at Alameda three days before this. He gave me the recording.
AUSA: Here’s a CD, have you reviewed it?
Drappi: Yes. It’s audio clips.

Audio of Caroline Ellison, with buzz behind:
Ellison: You guy have probably seen this on Slack or Twitter…
[Aim to get the audio clip and upload it later, maybe to Soundcloud: https://t.co/56M7kNGAO6

Back in the courtroom:
AUSA: Who asked Ms. Ellison if there was a plan to repay customers?
Drappi: I did.
AUSA: What did you mean when you said, That sounds pretty bad?
SBF’s lawyer: Objection!
Judge Kaplan: Sustained.

AUSA: Mr. Drappi, I’m sure it wasn’t a YOLO thing, what does YOLO mean?
Drappi: You Only Live Once.
Audio:
Ellison: FTX like always allowed Alameda to borrow user funds..

Source: @InnerCityPress/X.com

His testimony lasted for about an hour, before he was excused and Zac Prince, BlockFi’s CEO was called to the stand, with just enough time to state his name, previous occupation, and what happened in a few words in the last days of BlockFi.

October 11 – Day 6: Caroline Ellison’s testimony goes on, with further revelations on SBF.

3:18 EST

For the last 1h40, Caroline Ellison recounted how SBF worked on his image to get customers and investors, including driving a Toyota Corolla and not combing his hair because “it had gotten him bonuses at Jane Street and was important to FTX”.

AUSA Sassoon then shifted her questions to the events in the week prior to FTX imploding, the leaked financial statements and the communication between Ellison, Nishad Singh, Gary Wang and Sam Bankman-Fried. Ellison mentioned a Signal message in which Singh estimated the hourly withdrawals on FTX to $120 million.

After this, it is all about Signal messages between herself and SBF, talking about who should tweet what in response to whom, as well as the strategy to repay some of the lenders:

Ellison: The tweet characterizes the delay as being about anti-spam and nodes. But we just didn’t have the money.
AUSA: Are these the tweets of CZ of Binance?
Ellison: Yes. He tweeted, “we have decided to liquidate any FTT on our books.” I was stressed out.

AUSA: Did you discuss this tweet with the defendant?
Ellison: Yes. We decided I should write a tweet in response. We had a Signal chat group.
AUSA: You said, You would buy all of Binance’s FTT at $22.
Ellison: I wanted to call his bluff – his aim was to hurt FTX

Source: @InnerCityPress/X.com

AUSA: Did Alameda still have lenders?
Ellison: Yes. They were recalling the loans. I wasn’t sure how to balance with responsibilities to FTX customers.
AUSA: GX 410. Mr. Arora, an agent of the defendant.
SBF’s lawyer: Not in the scope of the agency
Judge: Denied

Ellison: I said I could start repaying the lenders. Sam said, the small ones, fine, but not BlockFi yet. How much is Genesis?
AUSA: GX 412
[Note: this “Small Group Chat” included… Joe Bankman

Source: @InnerCityPress/X.com

Joseph “Joe” Bankman, Sam Bankman-Fried’s father, sometimes acted as counsel and advisor for Alameda and FTX’s executives.

Before the mid afternoon break, Assistant U.S. Attorney Sassoon started a line of questioning regarding Ellison’s first meeting with the U.S. authorities:

AUSA: When did you meet with the FBI and prosecutors?
Ellison: December 2022.
AUSA: What had happened?
Ellison: The FBI searched my parents’ home, took my phone and computer and journal.
AUSA: What info did you provide?
Ellison: The crimes we had committed.

Source: @InnerCityPress/X.com

Recap of the morning in court

On the sixth day of Sam “SBF” Bankman-Fried’s criminal trial in New York, startling revelations came to light. Caroline Ellison, the former CEO of Alameda Research, took the stand to detail her involvement with the crypto exchange FTX’s funds. Ellison admitted that under the direction of Bankman-Fried, she produced “alternative” balance sheets for Alameda’s use of FTX’s resources. Of the seven spreadsheets she crafted, one was presented to Genesis, a sheet that obscured a substantial borrowing of $10 billion from FTX.

Ellison’s testimony painted a picture of internal turmoil and concern. She described a looming fear that, should the truth emerge about the misuse of FTX funds, there could be a mass exodus of customers. She openly acknowledged her actions as being “dishonest” and “wrong.” Yet, she placed a significant portion of the blame for FTX’s financial woes on Bankman-Fried. Despite her claims, defense attorneys are crafting a narrative suggesting Ellison might have been more of an instigator than she admits.

Further deepening the intrigue, Ellison divulged that in a bid to raise capital for FTX, Bankman-Fried had considered an investment from a high-profile individual: Saudi Crown Prince Mohammed bin Salman (MBS). This potential fundraising effort was found documented in Ellison’s online journal, listed under the ominous title “Things Sam is Freaking Out About.” The journal entry also hinted at attempts to sway regulators against the crypto exchange, Binance.

The connection to MBS opens a new dimension to the case. Renowned for his investments in blockchain through Saudi Arabia’s sovereign wealth fund, MBS’s reputation is not without blemish, being controversially tied to the 2018 assassination of journalist Jamal Khashoggi. An April report shed light on a meeting between Bankman-Fried and MBS in Saudi Arabia, held shortly before FTX declared bankruptcy. While Bankman-Fried’s ambitions aimed at raising $1 billion for FTX, Saudi financiers floated a more modest figure, suggesting around $250 million. Intriguingly, this sum aligns perfectly with the bail amount set for Bankman-Fried following his arrest in the U.S.

As the trial progresses, Ellison, who has candidly admitted to her fraudulent activities during her tenure at Alameda, will continue her testimony. With the prosecution eyeing a wrap-up by the end of October, the floor will soon be handed to Bankman-Fried’s defense. Bankman-Fried remains steadfast in his plea, denying all seven criminal allegations related to FTX’s fraud. Furthermore, he is slated to face another set of charges in a trial come March 2024.

October 10 – Day 5

16:30 EST

AUSA Sassoon and Judge Kaplan call for the end of this first day in Caroline Ellison’s testimony. So far, she has confirmed the unlimited line of credit alleged by Gary Wang in last week’s testimonies, as well as the special access to FTX’s customer deposits, under the supervision of Sam Bankman-Fried despite his attempts to appear unrelated to Alameda.

The prosecutors and defense lawyers are conferring with Judge Kaplan on the witnesses to follow after Ellison, including Zac Prince, former CEO of Blockfi, as well as the Ukraine witness the defense tried to preclude from testifying. We will pick up this live tomorrow at 10AM EST.

16:18 EST

Ellison is asked about the Robinhood shares SBF purchased last year, with a loan from Alameda. The shares were seized by the government earlier this year as per a request from the FTX lawyers with regards to the bankruptcy proceedings.

16:07 EST

Sassoon continues her inquiries about the spreadsheets and documents showcasing Alameda’s holdings, FTX access and loans from Genesis (which went bankrupt following FTX’s implosion).

AUSA: You were assuming that FTX customer money would be available to Alameda?
Ellison: That’s right.
AUSA: What does this mean, “Genesis freaks out immediately?”
Ellison: That Genesis would call in all our loans.

AUSA: You calculated a 30% chance Alameda could not repay its loans – was that of concern?
Ellison: Yes.
AUSA: Even if you used FTX customer funds?
SBF’s lawyer: Objection!
Judge Kaplan: Overruled
AUSA: And you still wouldn’t be able to repay
Ellison: That’s right

Source: @InnerCityPress/X.com

And as an answer to the concerns raised by Ellison, SBF suggested to “expand investments” by borrowing from FTX, i.e. its customers.

15:40 EST

Ellison is asked about the equity value of FTX and the value on paper of the Sam coins, estimated at the time at respectively $20 billion and $10 billion. For instance, at its all-time high, Solana had a market capitalization of $78 billion. It is now under $10 billion.

15:29 EST

Court is back in session. Ellison goes back to her account of her time at Alameda and how things were managed, including trades and returns using Google Docs:

AUSA: You were speaking about expected value.
AUSA: What is this? (Showing a piece of evidence to Ellison)
Ellison: One of my Google Docs.
AUSA: Did you write parts of this page?
Ellison: Yes. I would keep these Docs, I’d add notes

AUSA: What’s this? Ellison: I cut and pasted from Sam’s bad case scenario, with FTT, SOL – we owned a lot of Solana — and SRM down 75%, and investments down 100%
AUSA: How would that be possible?
Ellison: They were speculative.

Source: @InnerCityPress/X.com

SRM is the utility token for the Serum DEX on Solana.

15:12 EST

The prosecution calls for the mid afternoon break, for which the judge agrees. The court takes a 15 minutes recess.

15:03 EST

AUSA Sassoon now questions Ellison about loans made from Alameda, who received them and for what use:

AUSA: Did you get any loans from Alameda?
Ellison: One loan of $3.5 million for a gambling company people at FTX wanted to put in my name since I wasn’t on the books of FTX. Money also went to political contributions. Ryan Salame got a $35 million loan

AUSA: What was Ryan Salame using the loans for?
Ellison: Contributions to Republicans. Sam gave $10 million to Biden, he thought it bought him access.

Source: @InnerCityPress/X.com

14:56 EST

Ellison continues her story, talking about how Bankman-Fried directed the way she should trade the FTT token for Alameda, without mentioning it to anyone. She talks about what she calls the “Sam” coins, which included Solana (SBF and FTX were known to be early supporters of the project).

AUSA Sassoon goes back to how Ellison ended up becoming co-CEO:

AUSA: When did you become co-CEO?
Ellison: 2021. Sam said he wanted to step down, to separate things optically. We were on a break. But we started dating again.
AUSA: How would you describe the power dynamic of your personal relationship?
SBF’s lawyer: Objection!

AUSA: Why did you break up? Ellison: He wasn’t spending much time with me.
AUSA: Was it secret?
Ellison: At first. Then he told me I could say we were living together, but no more.
AUSA: What was your salary?
Ellison: $200,000. Then a bonus in 2021 of $20 million

AUSA: When you were co-CEO, what did you do?
Ellison: It didn’t change much.
AUSA: Did you feel qualified?
Ellison: Not really. But Sam said I should do it. I checked everything with him. He was the person I reported to. He could fire me

Source: @InnerCityPress/X.com

14:32 EST

Binance is now part of the line of questioning as AUSA Sassoon questions Ellison about the relationship with CZ’s exchange and the FTT tokens it held:

AUSA: What is Binance?
Ellison: A competitor which owned $2 billion of our FTX stock. Sam wanted to buy it back in the summer of 2021.

AUSA: What did the defendant say about buying it back?
Ellison: Otherwise Binance would cause trouble.
AUSA: Who was in this discussion and where?
Ellison: Hong Kong office. It was me, Sam and Trabucco.
AUSA: Who is Trabucco?
Ellison: Sam Trabucco, Alameda co-CEO

Source: @InnerCityPress/X.com

14:28 EST

Ellison gives more details about the line of credit that she thought Alameda would have really needed, and the way Alameda used to trade with FTX funds, recounting a conversation with SBF about the matter:

Ellison: If a coin was trading for higher on Binance, we could withdraw from FTX and sell there.
AUSA: Did you have concerns about Alameda using FTX customer funds?
Ellison: I thought customers weren’t aware of. But I was just a trader at the time.

AUSA: Did you raise it to the defendant?
Ellison: Yes, I asked if it would show up on the audit. He said don’t worry, the auditors won’t be looking at that.
AUSA: When was that?
Ellison: 2020.

AUSA: Why did the defendant say you were having an audit?
Ellison: He said, to appeal to investors.
AUSA: Was FTX disclosing to customers the Alameda line of credit?
Judge Kaplan: Compound. Rephrase.
AUSA: To auditors?
Ellison: No.
AUSA: Investors?
Ellison: No

Source: @InnerCityPress/X.com

14:22 EST

Ellison now confirms Gary Wang’s allegations about a line of credit for Alameda, mentioning however that she didn’t know its size.

14:15 EST

Ellison answers the prosecution’s questions about the origin of Alameda’s funds and how they were used:

AUSA: Did there come a time the defendant told you to use FTX funds?
SBF lawyer: Objection! Leading!
Judge Kaplan: Sustained.
AUSA: Where did you borrow from?
Ellison: Third parties and… FTX.

AUSA: When did FTX receive money into Alameda’s bank accounts?
Ellison: 2020. And into 2022. North Dimension was the name I was aware of.
AUSA: How much FTX money got deposited with Alameda?
Ellison: Ten to twenty billion dollars.

AUSA: What did Alameda do with the money?
Ellison: Repay loans, investments, and stable coin conversions like USDC. That was about $2 billion.
AUSA: What happened to the rest?
Ellison: It was used for Alameda’s purpose and other purposes.

Source: @InnerCityPress/X.com

14:09 EST

Ellison tells the court SBF had the ambition of becoming the President of the United States.

14:05 EST : The trial resumes

Caroline Ellison is back on the stand to continue her statement, recounting her past, and her relationship with Sam Bankman-Fried:

AUSA: Once you were at Alameda, and you discovered losses, what did the defendant tell you?
Ellison: That he was sorry and would tell me more.
AUSA: Did your relationship remain strictly professional?
Ellison: No.

Source: @InnerCityPress/X.com

12:49 EST

Judge Kaplan orders to break for lunch, the trial will resume at 2PM with the continuation of Ellison’s testimony.

12:39 EST : Caroline Ellison enters the courtroom as she is called to the stand

After the defense tried to get some time, Judge Kaplan insisted to keep a timeline.

Caroline Ellison, former CEO of Alameda Research, is starting her statement, guided by the questions from Assistant U.S. Attorney Sassoon:

AUSA Sassoon: How do you know the defendant?
Ellison: At Jane Street then Alameda. We dated for a couple of years.
AUSA: Did you commit crimes?
Ellison: Fraud.
AUSA: With others?
Ellison: Yes.
AUSA: Do you see Sam Bankman-Fried?
Ellison: He’s over there…

AUSA: What was his involvement in the crimes?
Ellison: He was the head of Alameda then FTX. He directed me to commit these crimes.
AUSA: What makes you guilty?
Ellison: Alameda took several billions of dollars from FTX customers and used it for investments.

Source: @InnerCityPress/X.com

As expected, her statement is directly implicating SBF in the fraud and loss of billions of dollars.

AUSA: What was the defendant’s role?
Ellison: He set up the systems and told us to take the money.
AUSA: How much did Alameda take to repay its lenders?
Ellison: In the ballpark of $10 billion. Ultimately around $14 billion

AUSA: How did you defraud Alameda’s lenders?
Ellison: I sent balance sheets that made Alameda look less risky that it was.
AUSA: Why was there not enough money for customers in Nov 2022?
Ellison: We had take it to repay lenders.

Source: @InnerCityPress/X.com

12:18 EST

AUSA Roos questions Gary Wang with regards to his meetings with the U.S. authorities. He implicated in three of the four charges held against him Sam Bankman-Fried, Nishad Singh and Caroline Ellison. Seeing as AUSA Roos is done with his questions, and with no redirects from the defense, Judge Kaplan take this time to get some more details on the promissory notes before excusing the witness :

Judge Kaplan: I have a couple of questions. This promissory note, you said it was for $35 million to make an investment – by whom?
Wang: I don’t know. Some company Sam wanted me to invest in. My understanding was that Sam signed a larger note

Judge Kaplan: It was payable to Alameda research, right?
Wang: Yes. Judge Kaplan: Either counsel want to follow up?
AUSA Roos: No, your Honor.
SBF’s Everdell: It was for equity stakes?
Wang: I don’t know.
Judge Kaplan: Witness is excused

Source: @InnerCityPress/X.com

11:55 EST

Everdell seems to be done with his questions, Judge Kaplan gives the floor to Assistant U.S. Attorney Roos for redirects. Redirects are an opportunity for a lawyer or prosecutor to question his/her own witness after cross-examination.

AUSA Roos: The $35 million loan, do you know what it was for?
Wang: I don’t recall.
AUSA: Roos: How about DX 184? For $2.6 million – do you know what this was for?
Wang: No.

AUSA Roos: Why did you sign them?
Wang: I was given them to sign, Sam wanted me to sign them. I trusted him. The money came from Alameda.
AUSA Roos: Did the lawyers tell you where Alameda got the money from?
SBF’s lawyer: Objection! Calls for speculation.

AUSA Roos: Were they used for market making? Did Alameda make withdrawls? How much?
Wang: $8 billion.
AUSA Roos: What that necessary for market making?
Everdell: Objection!
Judge: Overruled.
Wang: No.

Source: @InnerCityPress/X.com

11h44 EST

The trial starts again after the morning break. Everdell comes back to his line of questioning about Wang’s cooperation with the authorities:

Everdell: So next, there were proffer sessions with prosecutors, right?
Gary Wang: Yes.
Everdell: You signed a proffer agreement, right?
Wang: Yes.
Everdell: It says, this is not a cooperation agreement, right?
Wang: Right.

Everdell: In your 5 proffer sessions with the government, you went over all these events, right?
Wang: Yes.
Everdell: The charges carry a maximum sentence of 50 years?
Wang: Right.
Everdell: But the US could send a 5K letter to the court?
Wang: Yes.

Source: @InnerCityPress/X.com

A 5K is a letter filed with the court by a federal prosecutor to request a reduced sentence for cooperation of a defendant in a case.

11:10 EST

Everdell jumps forward in time to talk about the week of the Chapter 11 filing, including the first time Wang contacted lawyers in the U.S.:

Everdell: Nishad Singh left the Bahamas before you did, he on Nov 9, right?
Wang: Yes. He seemed distraught. He went back to the US. I stayed a few more days
Everdell: You and Sam met with the Bahamas regulators SCB on Nov 12, they required you, right?
Wang: Yes.

Everdell: OK. The penalty for not going would have been contempt, right?
Wang: I waited in a room outside. Then we all went back to FTX

Everdell: You were required to transfer the assets to the SCB, right?
Wang: Yes. Police officers showed up around 9 pm at the office —
Everdell: Not the apartment?
Wang: No. They asked for our passports. We complied.

Everdell: By Nov 13 you hired lawyers here in NY, right?
Wang: Yes. I wanted to consider cooperating.
Everdell: You had to act quickly?
Wang: There are advantages to that.
Everdell: Your lawyers met the prosecutors then flew to the Bahamas to you?
Wang: Yes

Source: @InnerCityPress/X.com

11:00 EST

As per the late October 9 filing, Everdell is proceeding to ask Gary Wang about the $200 million he received as loans from Alameda. Wang indicates that he used $200,000 to buy a house. He is then showed a binder and a specific tab indicating $35 million.

10:40 EST

Gary Wang gets questioned by the defense about a conversation he had with SBF in September 2022, in which SBF suggested to shut Alameda Research down:

Everdell: Do you recall any issue with hedging prior to this memo being circulated?
Gary Wang: Sam was angry Alameda did not hedge its positions.
Everdell: And Caroline was the CEO in charge?
Gary Wang: Well, she was the CEO at the time

Everdell: Sam wanted to shut Alameda down?
Gary Wang: He thought there was a 30% chance it should be shut down. I wasn’t sure.
Everdell: You thought they were necessary as a market maker?
Wang: There was more.
Everdell: Didn’t you tell the FBI, “market maker”?

Source: @InnerCityPress/X.com

10:05 EST

Attorney Everdell is now coming back to Alameda’s 65$ billion line of credit. The prosecution is objecting to the line of questioning so Everdell now proceeds to talk about the FTT token:

Everdell: If Alameda withdrew from FTX, it would not be reflected in the fiat account?
Gary Wang: Right.
Everdell: You said the line of credit Alameda had was $65 billion?
AUSA Roos: Objection, asked and answered.
Judge: Sustained

Everdell: But Alameda did not draw down nearly that $65 billion amount, right?
AUSA Roos: Objection! Vague.
Judge Kaplan: Sustained.
Everdell: Mr. Wang, Alameda held assets on the FTX exchange right? Did it hold FTT?
Gary Wang: Yes.
Everdell: You helped create FTT?
Wang: Yes.

Everdell: FTX did not set the price on FTT, right?
Gary Wang: Alameda traded it.
Everdell: What was the price in 2022?
Wang: Can you be more specific?
Everdell: Let me show you this… Did Binance agree to buy that stake is sold in Nov 2022?
Wang: Yes.

Source: @InnerCityPress/X.com

09:40 EST

The trial is starting, and the cross-examination of Gary Wang by the defense is picking up where it was left off:

SBF’s lawyer Everdell: Last week you said the amount was overstated by $8 billion?
Gary Wang: Yes.
Everdell: You had known about the bug since the end of 2021 but hadn’t gotten a change to fix it?
Gary Wang: Yes.

Gary Wang: I learned that Alameda was borrowing from FTX when Sam asked me to calculate how much interest they owed —
Everdell: I’m asking about the bug. Let’s move to June of 2022.
Judge Kaplan: Did you know the amount of the overstatment?
Wang: $500 million

Source: @InnerCityPress/X.com

What do you need to know ahead of Day 5:

Showing how high are the stakes in this trial, both the prosecution and the defense filed motions over the weekend.

On Sunday evening, Assistant U.S. Attorney Thane Rehn and his colleagues filed a motion to keep the defense from using “the current value of certain investments made by the defendant” as evidence or arguments in the proceedings. The motion specifically targets a $500 million investment made by Sam Bankman-Fried in April 2022 in AI startup Anthropic. The latter has recently announced that it is trying to raise further funds, from Amazon and Google, to reach a valuation between $20 billion and $30 billion.

A capital raise would increase significantly the value of SBF’s investment, potentially giving more hope for fund recovery to all the people whose funds were stolen. Such a narrative could help sway jurors. The prosecutors want the trial and jury to focus solely on the actual charges, including but not limited to “misappropriation of funds”.

Late Monday evening, Bankman-Fried’s lawyers filed in turn a motion with Judge Kaplan to request permission to cross-examine Gary Wang with regards to the loans he received from Alameda, but more specifically to the roles and presence of FTX lawyers at the time. The defense’s intent is to legitimize the money transfers in order to fight the money laundering charges.

The trial will open today with the rest of Gary Wang’s cross-examination, and the highly awaited first appearance of Caroline Ellison, Alameda’s ex CEO/SBF’s ex-girlfriend and roommate.

October 6 – Day 4: Alameda’s mounting advantages on FTX take center stage, setting stage for Ellison’s testimony

Back in court on Friday, Gary Wang, co-founder of Alameda Research and FTX, continued his testimony, further unraveling the intricate ties between the two firms. Evidence showed that Alameda enjoyed privileges on FTX, such as an unlimited negative balance and a massive $65 billion line of credit. Wang disclosed that despite Bankman-Fried’s public claims of Alameda having a regular account on FTX in 2019, the company was given exclusive rights to withdraw even with a negative balance. This complex relationship resulted in an $8 billion deficit in FTX’s customer assets by 2022.

The MobileCoin exploit was another focal point, with discussions hinting at a strategy to shift deficits to Alameda’s books to shield FTX’s investors. By late 2021, Alameda’s mounting liabilities stood at $14 billion. To separate Alameda from FTX, there were considerations of introducing another crypto-trading firm, Modulo, as a potential market maker.

The courtroom witnessed tense moments, including Judge Kaplan’s evident impatience with the defense team. As the trial progresses, Caroline Ellison is slated to testify on October 10, likely adding more layers to the already complex narrative surrounding FTX’s downfall and Alameda’s role in it.

October 5 – Day 3: Revelations of Alameda’s privileges on FTX intensify with Gary Wang’s fraud confessions.

On October 5, the FTX trial continued to grip the attention of many as Adam Yedidia took the stand. The former FTX developer pulled back the curtains on the intricate financial web between FTX and Alameda. He detailed how an Alameda account named North Dimension was utilized by FTX for depositing users’ funds, given the hurdles in obtaining an independent bank account for FTX. This method eventually snowballed into a hefty $8 billion liability from Alameda to FTX by June 2022.

Although initially undeterred by this approach, Yedidia’s apprehensions mounted upon realizing the vastness of the liability. His concerns took a serious turn when he learned that Alameda was channeling these funds to settle its own debts, a revelation that eventually led him to resign from FTX in November 2022. While Yedidia’s testimony was rife with startling admissions, the defense was quick to underscore his immunity order, subtly hinting that self-preservation might be influencing his testimony.

Matthew Huang’s insights offered another layer to the unfolding saga. The co-founder of Paradigm reminisced about his firm’s hefty investment of $278 million in FTX over 2021 and 2022. Yet, he candidly confessed his unawareness of the intertwined finances of FTX and Alameda and the unique privileges Alameda enjoyed, such as immunity from FTX’s liquidation engine. Huang voiced his unease over FTX’s lack of a conventional board of directors, highlighting Sam Bankman-Fried’s reluctance towards institutionalizing investor participation in governance.

However, it was Gary Wang’s testimony that dropped the most bombshells. As a co-founder of both entities in question—FTX and Alameda Research—Wang owned up to wire fraud, securities fraud, and commodities fraud, implicating himself alongside Bankman-Fried and Caroline Ellison. He delved deeper into Alameda’s advantageous standing with FTX, revealing privileges like unrestricted fund withdrawals and an eye-watering line of credit amounting to $65 billion. Additionally, he brought to light an undisclosed loan from Alameda, fluctuating between $200 million and $300 million.

The proceedings of the day unfurled a series of revelations, casting a spotlight on the questionable financial maneuvers between FTX and Alameda, alongside glaring managerial oversights and potential fund misappropriations.

October 4 – Day 2: The DOJ and SBF’s defense present their opening statements, and the first witnesses appear.

The atmosphere inside the courtroom intensified as the trial of SBF really started. Day 2 saw the Department of Justice (DOJ) and Bankman-Fried’s defense team presenting contrasting images of the FTX founder. Where the DOJ painted a portrait of deceit, the defense portrayed him as a young entrepreneur navigating complex business choices. Before the end of the day, the first witnesses made their appearance.

Marc-Antoine Julliard, a French trader based in London, was the first to take the stand. Julliard’s testimony provided insights into the faith many had placed in FTX and SBF. He reminisced about being drawn to FTX due to SBF’s influential presence on the then-Twitter platform and was comforted by the daily visibility of his FTX wallet balance. Despite knowing the risks associated with crypto investing, Julliard’s trust was shattered when he faced unprocessed Bitcoin withdrawals amounting to around $20,000 in November 2022.

Adam Yedidia, an MIT acquaintance of SBF and a former employee at both FTX and Alameda, followed. His closeness to the situation was evident as he spoke about living with SBF and nine others in a $30 million apartment in the Bahamas, funded by Alameda, but directed by SBF. This housing arrangement further blurred the lines between the two entities. Yedidia’s shocking revelation that FTX customer funds might have been funneled to appease Alameda creditors was a significant highlight, adding depth to the allegations against SBF.

Earlier, prosecutors had unveiled a forceful stance, alleging that SBF had built a glass empire of lies, using Alameda as a conduit for misappropriating funds. They painted a lavish picture of SBF’s lifestyle and suggested that these riches were amassed at the expense of FTX’s customers. Allegations of a “secret ability” within FTX’s software, enabling the illicit transfer of funds to Alameda, were underscored.

On the other side, the defense tried to humanize SBF, describing him as a “math nerd” who neither partook in exuberant parties nor had malicious intentions. They defended SBF’s choices as the normal pitfalls any start-up could face, emphasizing that being at the helm of a company that goes bankrupt is not, in itself, a crime.

While prosecutors were armed with company documents, financial statements, and expected testimonies from various FTX insiders, the defense had pointed fingers at Binance’s role in FTX’s downfall. They also alluded to SBF’s belief that FTX could legally loan funds to Alameda, denying any covert transactions.

As the courtroom empties on Day 2, with testimonies from key figures like Caroline Ellison still anticipated, followers of the trial are left grappling with a question: Was the collapse of FTX due to entrepreneurial miscalculations or was there deeper deceit at play? The next days promise to unveil more layers of this intricate saga.

October 3 – Day 1: Jury Selection Begins Amidst Crypto Biases

Jury selection commenced in Sam Bankman-Fried’s (SBF) trial with a narrowed down pool of 50 potential jurors, aiming to finalize 12 by the next morning. Several jurors excused themselves due to biases from financial losses in crypto, exacerbated by FTX’s downfall. Juror Zal Dang expressed skepticism about remaining unbiased towards crypto. Judge Kaplan inquired about jurors’ familiarity with FTX or Alameda Research, with two admitting to financial losses in crypto. Some disclosed professional ties to the financial sector, including affiliations with FINRA, Bank United, and Morgan Stanley. Judge Kaplan emphasized avoiding media coverage of the trial, referencing a recent 60 Minutes episode featuring author Michael Lewis and SBF. SBF, facing charges of conspiracy and fraud, pleaded not guilty. Experts speculate that the jury’s limited crypto understanding might impact the conviction decision, a notion echoed by a juror’s complaint about crypto’s complexity, to which Judge Kaplan showed little sympathy.