Developments on day 7 of Sam Bankman-Fried’s trial: Prosecutors and defense attorney Sam Bankman-Fried confronted Caroline Ellison, as well as called witness Zac Prince.
Report on the trial of former FTX CEO Sam Bankman-Fried:
- Day 1&2: Opening statements by the prosecutor and defense attorney
- Day 3: Crucial witnesses Adam Yetitia, Matt Huang
- Day 4: Former Chief Technology Officer of FTX, Gary Wang
- Day 5&6: Former CEO of Alameda Research, Caroline Ellison
Former Alameda Research CEO, Caroline Ellison, underwent a tense confrontation with the defense attorney representing Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX. This interaction unveiled a series of details concerning the relationships between the parties and events surrounding Alameda Research.
Caroline Ellison faced questions from the US Department of Justice prosecutor regarding her relationship with Sam Bankman-Fried, how they managed investment risks, and their expectations from the FTX – Alameda exchange.
Notably, Alameda Research was revealed to be a trading company rather than an investment fund, as it did not receive funds from other venture capital partners. The defense attorney also brought up Sam Trabucco, the co-CEO of Alameda Research during the 2021-2022 period, who was believed to have a close connection with Sam Bankman-Fried and had joined the investment fund in 2019.
According to Caroline Ellison’s statement, she and Sam Trabucco co-managed Alameda’s trading operations. However, when Trabucco resigned in August 2022, Sam Bankman-Fried proposed a different replacement. Ellison argued that Alameda Research would operate more efficiently with a single decision-making manager.
Ellison also disclosed that Alameda Research incurred a $100 million loss in an incident involving LUNA-UST. A crucial meeting occurred in November 2022 when FTX users began withdrawing funds. In this meeting, Caroline Ellison revealed that Alameda had withdrawn funds from FTX users to repay the fund’s debts.
The prosecution attempted to introduce a video recording of the meeting to the court, but the presiding judge refused.
Furthermore, the court summoned other key witnesses. Christian Drappi, a software developer at Alameda Research, confirmed that Sam Bankman-Fried still had access to Alameda’s systems, despite the appointment of new CEOs. The audio recording of the important meeting confirmed that Sam Bankman-Fried was the authority granting Alameda permission to withdraw funds from FTX.
Additionally, Zac Prince, the founder and CEO of BlockFi, a cryptocurrency lending company, provided information about BlockFi’s loss of $800 million from Alameda due to liquidity crises in 2022.
The court session will resume on October 13th (US time). Stay tuned to CoinMinutes for further developments of the Sam Bankman-Fried trial.