SBF Trial – Full List of BitMEX Research Tweets

31 Oct 2023

The CIO of Ikigai Asset Management, Mr Travis Kling sent us a message, he asked for a blog post with a link to every Tweet we made in relation to the SBF trial. We decided to comply. Please see all the links below:

Full transcripts to the days with the SBF cross-examination

Sam Bankman-Fried Trial – Full Transcript – 31 October 2023

Second day of SBF cross examination and the end of the defences casehttps://t.co/QSveH9Rgsb
— BitMEX Research (@BitMEXResearch) October 31, 2023

Finally, what we have all been waiting for:

THE CROSS EXAMINATION OF SAM BANKMAN-FRIED

30 October 2023

Full transcript below:https://t.co/wv1WowHcoN
— BitMEX Research (@BitMEXResearch) October 30, 2023

Our prediction

Given SBFs approach to risk taking, surely he will elect to take to the stand.
— BitMEX Research (@BitMEXResearch) October 12, 2023

SBF on Cross Examination

When asked about whether using FTX customer money to repay Alameda's lenders moved risks on to FTX customers, SBF repeatedly attempted to avoid the question by randomly bringing up margin trading.

Q. And when you agreed that it made sense to repay Alameda’s lenders, you knew at…
— BitMEX Research (@BitMEXResearch) October 31, 2023

SBF caught in cross examiniation, making conflicting claims about whether Alameda had special privileges, which eventually resulted in it taking out FTX.

Q. Mr. Bankman-Fried, you agree, don’t you, that Alameda could never have accumulated a multibillion dollar negative balance…
— BitMEX Research (@BitMEXResearch) October 31, 2023

On cross, SBF claims he did not learn the details of "Allow Negative", a stance the prosecutor appeared to take apart as not believable…

Q. And as CEO of FTX, you thought highly of yourself, right?
A. I did.
Q. And you were dedicated to the success of your business, right?
A.… https://t.co/KT9wpbCeEC
— BitMEX Research (@BitMEXResearch) October 31, 2023

In today’s cross examination, on many occasions, SBF could not recall, did not remember or was not sure…

Please see some examples below:

Q. And isn’t it true, yes or no, that you stated on this podcast that you were not involved at all in Alameda trading and hadn’t been for… https://t.co/gbLSSzhCmV
— BitMEX Research (@BitMEXResearch) October 31, 2023

SBF Trial – 27 October 2023 – SBF Direct Examination from the defense

SBF Trial – 27 October 2023 – SBF Direct Examination from the defense

Q. Did you defraud anyone?
A. No, I did not.
Q. Did you take customer funds?
A. No.
Q. We're going to talk in detail about what happened at FTX, but can you tell us big picture.
A. Yeah. At a high level, there…
— BitMEX Research (@BitMEXResearch) October 27, 2023

Alameda’s first office

Q. Where was Alameda's first office?
A. The first office, it was in——it was a airbnb that we rented out in North Berkeley, California.
Q. Can you describe the layout of that airbnb.
A. Yeah. So it was listed as a two-bedroom airbnb. There were three of us,…
— BitMEX Research (@BitMEXResearch) October 27, 2023

The Alameda split in 2018

SBF claims that after the split, teh fund made 50% to 100% annualised returns

Q. Okay. Coming back to Ms. Ellison, about when did she join the company?
A. She joined in——right around late February or early March of 2018.
Q. And after she joined, did…
— BitMEX Research (@BitMEXResearch) October 27, 2023

Moving to Hong Kong

Q. Why did you move the company to Hong Kong?
A. I had ended up there almost accidentally, going to a conference. While there, I had, in a one-week period, more useful meetings than I'd had in the year prior in California. I ended up canceling my return…
— BitMEX Research (@BitMEXResearch) October 27, 2023

The 2019 blog post – "Our Liquidation Engine — how we significantly reduced the likelihood of clawbacks from ever occurring"https://t.co/ZuTZMgMBB8

Q. What is this?
A. This is a blog post that I had written early on in FTX's history about clawbacks and FTX's approach to them.…
— BitMEX Research (@BitMEXResearch) October 27, 2023

How did you initially win clients for FTX

A. We reached out to people we knew in the industry, friends of ours, basically. We got a few initial customers that way, a single-digit number. They gave feedback. We iterated on the product in response to that. Ultimately, some of them…
— BitMEX Research (@BitMEXResearch) October 27, 2023

Could Alameda borrow money from FTX?

Q. As a customer of the exchange, was Alameda permitted to borrow from the exchange?
A. Yeah.
Q. When it borrowed, where was the money coming from?
A. The money — my understanding was that it was coming from basically margin traders. It was…
— BitMEX Research (@BitMEXResearch) October 27, 2023

FTX’s Fast Growth

A. It grew substantially. In the early days it was trading a few million dollars a day. That grew to tens of millions of dollars a day in 2019. In 2020, that grew to hundreds of millions of dollars a day. And by 2022, it was 10 to $15 billion per day of trading…
— BitMEX Research (@BitMEXResearch) October 27, 2023

Risk engine problems in 2020 and SBF’s story on the origin of “Allow negative”

[SBF spoke at length about the risk engine operating incorrectly]

At this point, in 2020, the risk engine was effectively sagging under the weight of that growth and was running behind, which is to…
— BitMEX Research (@BitMEXResearch) October 27, 2023

The story of the Alameda co-CEOs

Q. Okay. And who did you turn over Alameda to as CEOs?
A. Originally it was Caroline Ellison and Sam Trabucco.
Q. And why did you ask them to do it?
A. They had been the second and third in command at Alameda when I had been CEO. They were both…
— BitMEX Research (@BitMEXResearch) October 27, 2023

Caroline romance with SBF

Q. Did there come a time that you had a romantic relationship with Ms. Ellison?
A. Yes, I did.
Q. What was the timing of that relationship?
A. We began dating in 2020, and we dated on and off for about two years.
Q. When did you break up?
A. Our final…
— BitMEX Research (@BitMEXResearch) October 27, 2023

SBF personal loans from Alameda

Q. Why did you believe you could borrow funds from Alameda?
A. I owned Alameda, I was the primary owner of it, and it had ad a few billion dollars, to my understanding, of arbitrage-based profit over the prior few years and far more than that in…
— BitMEX Research (@BitMEXResearch) October 27, 2023

SBF denied directing Nishad or Salame to make political donations

Q. Based on your interaction with others at FTX, did you ever come to learn whether other employees of the company made political donations?
A. Yes, I did.
Q. Who was that?
A. I know that Ryan Salame and Nishad…
— BitMEX Research (@BitMEXResearch) October 27, 2023

SBFs defence for manipulating 2021 revenue to over $1bn, which he wanted because “It's just a round number”

A. Ramnik told me that his calculations had it as a little bit under $1 billion.
Q. What, if anything, did you do after that?
A. I asked him to first confirm if that was…
— BitMEX Research (@BitMEXResearch) October 28, 2023

SBF Trial – 26 October 2023 – SBF Testimony (without jury)

SBF Trial – 26 October 2023 – SBF Testimony (without jury)

Today SBF testified without the jury present. This appears to be a practice for the judge, to help judge Kaplan decide what the jury should and should not be allowed to hear. SBF will testify for real tomorrow, (unless…
— BitMEX Research (@BitMEXResearch) October 26, 2023

CROSS EXAMINATION

Cross examination began with discussions about the auto-deletion of Signal messages and document retention policies

Q. Is it your recollection that the policy expressly authorized deleting company communications that did not fall within the regulated…
— BitMEX Research (@BitMEXResearch) October 26, 2023

SBF mentions in late 2021 that “Trabucco was slowly drifting effectively towards retirement”

A. I think late 2021. I don't remember the exact time.
Q. And what was your involvement in Alameda at that point?
A. So this was after the CEO role had transitioned to Caroline Ellison…
— BitMEX Research (@BitMEXResearch) October 26, 2023

North Dimension Bank, blaming Dan Friedberg for several failings and SBF repeating the phrase “I don't recall”

Q. First of all, whose idea was it to incorporate North Dimension?
A. It was communicated to me by Dan Friedberg. I know there were others involved. I'm not sure whose…
— BitMEX Research (@BitMEXResearch) October 27, 2023

SBF says that with respect to the North Dimension deposits, the payment agent agreement does allow Alameda to spend FTX customer deposits!

Q. And the payment agent agreement that we looked at during your direct testimony, does it say anything about Alameda being authorized to…
— BitMEX Research (@BitMEXResearch) October 27, 2023

On Alameda’s “allow negative” account feature, it appears in our view as if SBF is being particularly evasive and pretending not to understand the question when repeatedly asked if he knew about this feature. The judge even said that “the witness has what I'll simply call an…
— BitMEX Research (@BitMEXResearch) October 27, 2023

The moment SBF answered a question when he didn’t need to….

Q. Is that the limit of your understanding of what it means to safeguard assets?
A. No. I apologize. I think that answer was cut short a small fraction the way it's written. There are a number of things that I would…
— BitMEX Research (@BitMEXResearch) October 27, 2023

SBF when asked if its ok to take customer deposits

Q. Did you have conversations with CEOs of crypto exchanges about whether it was proper to use customer money out of omnibus crypto wallets for purposes other than customer trading and withdrawals and the like?
A. Let me, A,…
— BitMEX Research (@BitMEXResearch) October 27, 2023

On Dan Friedberg

Q. Didn't you tell Caroline Ellison that Dan Friedberg was unlike most lawyers you knew because he was not going to stop you from taking risks?
A. I don't recall saying that in particular. Had I said something like that, and I may have, it would have been, I…
— BitMEX Research (@BitMEXResearch) October 27, 2023

SBF Trial 25 October 2023

SBF Trial 25 October 2023

The moment in court when we found out SBF would be taking the stand:

THE COURT: Okay. Mr. Cohen, it's time to tell me what defense case, if any, you're going to put on, putting aside the question, ultimately, of a commitment with respect to the… https://t.co/Zg8C9UCpSa
— BitMEX Research (@BitMEXResearch) October 26, 2023

The story of the Genesis Global Trading loans to Alameda Research

The story of the Genesis Global Trading loans to Alameda Research

***Caroline Ellision Testimony at the SBF trial – 10 October 2023***

"Yeah. Around the end of 2018 or beginning of 2019, he met people from Genesis, which was a large crypto lending desk, and he told me he was… pic.twitter.com/tnOBbIeNxt
— BitMEX Research (@BitMEXResearch) October 21, 2023

After the testimony on 16 October 2023, SBFs defence team asked if he could have a half day tomorrow to sort out SBF’s access to Adderall. The court rejected the request.

SBF Trial

After the testimony on 16 October 2023, SBFs defence team asked if he could have a half day tomorrow to sort out SBF’s access to Adderall. The court rejected the request.

MR. COHEN: Yes, your Honor. Just circling back to the letter we sent to the Court about our…
— BitMEX Research (@BitMEXResearch) October 17, 2023

SBF Trial – Nishad Singh Testimony – 16 October 2023

SBF Trial – Nishad Singh Testimony – 16 October 2023

Just as for the other FTX insiders, a quick admission of the crimes committed at the start

Q. What was your job at FTX?
A. I was the head of engineering.
Q. Did you commit financial crimes while at FTX?
A. I did.
Q. What…
— BitMEX Research (@BitMEXResearch) October 16, 2023

The $1 billion investment in Genesis Digital Assets. SBF, Ramnik, and Ryan Salame visited Kazakhstan to make the deal. SBF “called the shots” with the investment.

Q. Okay. So starting with the top of the sheet, do you see in column A2 and A3, Genesis Digital Assets?
A. Yes.
Q.…
— BitMEX Research (@BitMEXResearch) October 16, 2023

$500m Anthropic Investment – SBF had “extreme” involvement in the deal

[This appears to have subsequently been a very good investment from a returns perspective]

Q. Let's take a look at row 4 here on the spreadsheet. Do you see a payment to a project name called Anthropic and…
— BitMEX Research (@BitMEXResearch) October 16, 2023

The $200m investment into K5 – SBF went to a dinner organised by the K5 folks, where gusts included: Hilary Clinton, Kamala Harris's husband, Katy Perry, Orlando Bloom, Kate Hudson, Leonardo DiCaprio, Jeff Bezos, Kendall Jenner and Kris Jenner. SBF was impressed with the…
— BitMEX Research (@BitMEXResearch) October 16, 2023

FTX’s Sponsorship deals

Q. How much did the Miami Heat arena sponsorship cost?
A. Summing the first three numerical values in column O, it's $205 million.
…
Q. What does MLB stand for?
A. I think Major League Baseball.
Q. What was the total deal amount?
A. I don't know if rows…
— BitMEX Research (@BitMEXResearch) October 16, 2023

Real Estate – The story of how the penthouse apartment was aquired

Q. Let me ask you more specifically then, what, if any, conversations did you have with the defendant generally about spending on real estate?
A. I had one conversation with him while I was still in Hong Kong,…
— BitMEX Research (@BitMEXResearch) October 16, 2023

The need for liquidity in the 2022 Terra Luna crypto crash

The idea of potentially purchasing lenders like Celsius, Voyager and BlockFi had two purposes:
1. To bail out the space;
2. “to make Alameda have access to more funds to borrow”

Q. You mentioned a few things: Borrowing,…
— BitMEX Research (@BitMEXResearch) October 16, 2023

Alameda accepted FTX customer fiat deposits from the very start, before the main FTX website even went live

A. Very, very early in FTX's existence. One of the first things that FTX did before going live was connecting it to https://t.co/G44wIONVzw, which was a reskin of another…
— BitMEX Research (@BitMEXResearch) October 16, 2023

Nishad’s view on using customer funds

Q. What was your understanding as to whether Alameda was allowed to use or spend the FTX customer fiat deposits it had received?
A. I didn't have an affirmative understanding, but using it would break common-sense expectations from…
— BitMEX Research (@BitMEXResearch) October 16, 2023

seoyuncharles88@gmail.com – SBF did not want Alameda to pay interest on its large loan from FTX customers. Therefore, the balance was moved to a location where there was no interest charge. It was moved to an account called: seoyuncharles88@gmail.com

Q. Now what, if any,…
— BitMEX Research (@BitMEXResearch) October 16, 2023

FTX never implemented liquidations. If a customer was liquidated at price worse than the bankruptcy price, FTX never implemented any system to deal with that loss.

Q. What's a clawback?
A. A clawback is a mechanism for resolving any losses that arise from a liquidation. And by…
— BitMEX Research (@BitMEXResearch) October 16, 2023

SBF wanted to include employee Serum in the collateral, to make it appear like Alameda had more collateral than it did. FTX employees purchased Serum at the coins genesis and Sam decided how much everyone could buy

Q. So circle back to your conversation with the defendant on…
— BitMEX Research (@BitMEXResearch) October 16, 2023

The private chat with SBF on the balcony in the evening

Q. And where did you speak with the defendant?
A. On the balcony of the Orchid 6 penthouse where we lived.
Q. Why did you meet on the balcony?
A. Sam and I almost never met; very, very rarely. I knew this needed to be…
— BitMEX Research (@BitMEXResearch) October 17, 2023

In September 2022, while SBF was in the Middle East trying to raise money, SBF pitched the idea of a deal with Telegram to get $TON tokens. This would cost $120 million

A. There was a point when Sam was in the Middle East, he sent a message to a Signal group called hashtag…
— BitMEX Research (@BitMEXResearch) October 17, 2023

Political donations

Q. Walk us through how the donations were made.
A. There was a Signal chart called donations processing in which Sam or Gabe, his brother, or Michael Sadowsky, who worked with Gabe, or their associates would request that a donation be made in my name. Ryan…
— BitMEX Research (@BitMEXResearch) October 17, 2023

Manipulating FTX’s revenue upwards to trick FTX investors

Q. When you were working at FTX, did you ever work on a project relating to making FTX's revenues higher?
A. Yes.
Q. And when approximately was that project?
A. December 30 or 31 of 2021.
Q. Can you describe what the…
— BitMEX Research (@BitMEXResearch) October 17, 2023

SBF Trial – BlockFi CEO testimony (Zac Prince) – 13 Oct 2023

SBF Trial – BlockFi CEO testimony (Zac Prince) – 13 Oct 2023

In June 2022, when FTX “rescued” BlockFi, BlockFI had no outstanding loans to Alameda since these had all been repaid. However, in the next few months, between August and November 2022, BlockFi lent over $800 million…
— BitMEX Research (@BitMEXResearch) October 14, 2023

When BlockFi lent money to Alameda, Alameda posted collateral. The collateral was in the form of FTT and Serum. Amazingly, after receiving the collateral, BlockFi deposited the collateral at FTX.

Q. Changing topics, was BlockFi a customer of FTX?
A. Yes. BlockFi used the FTX…
— BitMEX Research (@BitMEXResearch) October 14, 2023

BlockFi also kept $350m of customer funds on depsit at FTX. When FTX went bankcrupt, BlockFI has total exposure of over a billion dollars.

Q. The second part of your answer related to putting customer funds on FTX. What were you referring to?
A. We would place cash or…
— BitMEX Research (@BitMEXResearch) October 14, 2023

SBF Trial – 11th October 2023 – Caroline Ellison Testimony Day 2

SBF Trial – 11th October 2023 – Caroline Ellison Testimony Day 2

June 2022 market crash and Gensis asking for loans to be re-paid

Q. Apart from coins, the trading that Alameda was doing on various exchanges.
A. The day-to-day trading that we were doing during this time was…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Q. Ms. Ellison, I'll ask you again: What was your mental state when you realized that Alameda had billions of dollars in loans to repay and that it didn't have the money?
A. I was in sort of a constant state of dread at that point. I——I knew that we would have to take the money…
— BitMEX Research (@BitMEXResearch) October 11, 2023

The state of FTXs asset miss match in June 2022

Q. And so at the time how much US dollars, for example, had customers deposited versus how much was available for them on FTX?
A. They had deposited $13 billion, and only $3 billion was available on FTX.
Q. And what about Bitcoin?…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Carolines’s concerns in mid June 2022 “anyone would find out, everything would come crashing down”

A…I was——yeah, really worried that FTX customers would try to withdraw a bunch of
money at once and that we wouldn't be able to process those withdrawals.
Q. How did the concerns…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Genesis asking for more balance sheet details in June 2022

Q. Can you please read the message from Matt Ballensweig.
A. He says, "anything you guys can provide to help show a more updated view of equity/balance sheet etc. would be helpful."
Q. And the next message?
A. "Hey there…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Preparing 7 different balance sheets to send to Genesis

Q. So what did you do?
A. I prepared a spreadsheet with seven different alternative balance sheets that we could send
Q. And what was the goal of preparing seven different balance sheets?
A. I wasn't sure what the best…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Balance sheet version number 7

Caroline says SBF selected balance sheet number 7 to share with Genesis, a balance sheet that Caroline says understated the level of assets and liabilities. The liabilities went from $15bn in the “main “ version, to just $10bn in the version number…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Genesis response and a call between Genesis and SBF

"hey there – so spoke with Sam and I'm sure he filled you in—–wouldn't be pushing you guys here if it wasn't totally necessary but we want to unwind $500 million in 250 clips. If you guys can show us what that's going to cost,…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Caroline’s view on the balance sheet she sent to Genesis

Q. Did you consider the financial information that you sent to Genesis to be dishonest? A. Yes, I did.
A. Yes, I did consider it to be dishonest.
Q. Why?
A. Because it falsely stated the amounts of our actual assets and…
— BitMEX Research (@BitMEXResearch) October 11, 2023

SBF’s view on “lying and stealing”

Q. In the course of working with the defendant, did he talk to you about the ethics of lying and stealing?
A. Yeah. He said that he was a utilitarian, and he believed that the ways that people tried to justify rules like don't lie and don't…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Further details about Alameda’s lenders post June 2022 – including details about other lenders

Q. After Alameda repaid some of its lenders in June of 2022, what, if any, third-party loans did Alameda have left?
A. We still had maybe a ballpark of $4 billion of third-party loans…
— BitMEX Research (@BitMEXResearch) October 11, 2023

October 2022 Bitcoin Selling Plan

[This seems like a desperate plan to get USD, NOT a plan to manipulate the price of BTC downwards]

Q. What did you mean by: Plan, keep selling Bitcoin if greater than 20K, maybe a couple B more?
A. That was Sam's suggestion, that if Bitcoin…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Mohammed Bin Salman

Q. By raising capital for FTX by selling equity, what does that mean?
A. That means he was going to try to sell shares in FTX to people to get more money.
Q. What kinds of people?
A. To investors. The primary one that he talked about at the time was Mohammed…
— BitMEX Research (@BitMEXResearch) October 11, 2023

SBF policy on document retention

A. A lot of it was over Signal. Some of it was in-person conversations as well.
Q. Do these Signal messages still exist?
A. No.
Q. Why not?
A. Because Sam directed us to use the disappearing messaging setting on our Signal, meaning that all…
— BitMEX Research (@BitMEXResearch) October 11, 2023

The saga involving the “bribe to Chinese government officials”, “Thai prostitutes” and a joke about an ex-employee’s farther turning them all in to the Chinese government

Q. Before June of 2022, do you recall occasions when you and the defendant spoke in coded terms about…
— BitMEX Research (@BitMEXResearch) October 11, 2023

SBF said it was all ”Carolines fault” for failing to hedge

Q. I want to turn to the summer and fall of 2022. Around then what, if anything, did you and the defendant discuss about ways to get more money for FTX?
A. We discussed a few different ideas. One was that FTX was in the…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Incredibly, in the fall of 2022, Alameda posted $2bn of collateral with brokers to short NASDAQ futures

Q. After this conversation with the defendant, did Alameda put on additional hedges?
A. Yes, we did.
Q. Does it cost money to put on hedges?
A. It requires you to put up…
— BitMEX Research (@BitMEXResearch) October 11, 2023

The BlockFi plan and Binance

Q. What about getting capital from BlockFi?
A. That's the thing I mentioned earlier. BlockFi was sort of in the process of being acquired by FTX, and Sam mentioned that we could use that relationship to get more loans or assets from them.
…
Q. Do…
— BitMEX Research (@BitMEXResearch) October 11, 2023

SBF’s Image – They had luxury cars and then changed to “normal” cars for image reasons

Q. As far as you know, what happened with Michael Lewis?
A. He did end up writing a book about Sam.
Q. And can you read the second half of the message from Will.
A. It says, "But if a whole…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Caroline had a notebook!

Q. We see some handwritten notes here. Who wrote this?
A. I wrote this.
Q. And where did you write this?
A. It was in a notebook I had.
Q. And we're going to take a closer look, but generally what were you writing here?
A. These were problems that I saw…
— BitMEX Research (@BitMEXResearch) October 12, 2023

Prosecutor complaining about SBF’s reactions in court:

“Your Honor, given where I'm standing, I've noticed several times since the lunch break that in response to things the witness has said, the defendant has laughed, visibly shaken his head, and scoffed, and obviously I'm not…
— BitMEX Research (@BitMEXResearch) October 12, 2023

Modulo

Q. What was Modulo?
A. Modulo was a crypto hedge fund that Alameda invested in at Sam's direction.
Q. And around when was that?
A. The initial investment was in early 2022, and we continued making further investments into the fall of 2022.
Q. What was your view of…
— BitMEX Research (@BitMEXResearch) October 12, 2023

Political donations

Q. And looking at row 48 as an example, it says there was a loan of 20 million on October 1, 2021, that was used for GAP. What is GAP?
A. GAP stands for Guarding Against Pandemics. That was Sam's political lobbying organization.
Q. And what did you learn…
— BitMEX Research (@BitMEXResearch) October 12, 2023

The final deposit run

Q. Nishad Singh then wrote you: Continuing so far at about 120 million an hour. What is that referring to?
A. He is saying that there were continued withdrawals, about $120 million dollars' worth, in the past hour.
Q. You wrote back with a sad face. Why did…
— BitMEX Research (@BitMEXResearch) October 12, 2023

Response to CZ saying he was selling FTT

Q. At the top you wrote: I think I am going to tweet at CZ that we will buy it all from him at $22. Any objections? What is the it that you're proposing buying it all for $22?
A. That refers to the FTT holdings that Binance had.
Q. Why…
— BitMEX Research (@BitMEXResearch) October 12, 2023

Private messages between SBF and Caroline on 7th Nov 2022

Q. Who are these messages between?
A. These are messages between me and Sam.
Q. Where it says at the top, by the way, if things got a lot worse, I don't think I am going to handle it well, who wrote that?
A. That was me.…
— BitMEX Research (@BitMEXResearch) October 12, 2023

Alameda even repaid some of its debts to third party lenders during the FTX deposit run:

Q. Why did you ask if it was bad to start repaying the lenders?
A. Because I wasn't sure if it would be illegal or just a bad idea for other reasons, so I wanted to get others' opinions.
Q.…
— BitMEX Research (@BitMEXResearch) October 12, 2023

$800m BTMX loss in 2021

Q. What, if any, other information were you aware of that was concealed from FTX investors?
A. I was aware that in 2021, FTX suffered a large loss——around $800 million——from the malfunctioning of its margin system and that this loss was——Alameda took on…
— BitMEX Research (@BitMEXResearch) October 12, 2023

Caroline’s personal FTX account was worth almost $1 billion at the peak!!

Q. While you worked at FTX what was the value of your account on FTX around its peak?
A. I think at its peak it was close to a billion dollars.
Q. And what happened to that account?
A. Well, the billion…
— BitMEX Research (@BitMEXResearch) October 12, 2023

SBF Trial – 10th October 2023 – Caroline Ellison Testimony

SBF Trial – 10th October 2023 – Caroline Ellison Testimony

Just like with other witnesses, quick admission of crimes at the start:

Q. When you were working at Alameda, did you commit any crimes
A. Yes, we did.
Q. When you say "we," who do you mean by "we"?
A. I mean Sam and I…
— BitMEX Research (@BitMEXResearch) October 10, 2023

Caroline joined Alameda in March 2018, she learnt things were bad pretty fast and SBF appears to have tricked her into joining

Q. When you started working at Alameda as a trader, what did you learn shortly after starting this new job?
A. Shortly after I started, I learned that…
— BitMEX Research (@BitMEXResearch) October 10, 2023

According to Ellison, SBF had a plan to borrow FTX customer funds for speculative investments, right from the start

Q. Of course. What was the defendant's involvement in using FTX customer money as a source of funds for Alameda in those early days at FTX?
A. He said that FTX…
— BitMEX Research (@BitMEXResearch) October 10, 2023

Caroline raised concerns about trading with customer money and what an auditor might think and SBF said that "auditors aren't going to look at that"

Q. The concerns that you just described having, did you ever voice them to the defendant?
A. Yeah. I remember one conversation…
— BitMEX Research (@BitMEXResearch) October 10, 2023

SBF decided to buy back FTX equity from Binance with FTX customer money.

Q. Prior to June of 2022 are there any occasions that stand out in your mind when the defendant told you to use Alameda's line of credit?
A. Yeah. There was one instance when we were buying FTX equity back…
— BitMEX Research (@BitMEXResearch) October 10, 2023

$1 billion of clients funds were spent buying back FTX equity from Binance

Q. When you said to the defendant that you didn't really have the money and you would have to borrow from FTX, what did he say?
A. He said, That's okay, I think this is really important, we have to get it…
— BitMEX Research (@BitMEXResearch) October 10, 2023

FTT token

Alameda had 60% to 70% of the initial supply

Q. Roughly what percentage of that initial distribution of FTT went to Alameda?
A. Not sure. Maybe, ballpark, 60 or 70 percent.
Q. What did Alameda pay for its initial supply of FTT that was about 60 or 70 percent of all…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Relationship between SBF and Caroline:

Q. How would you describe the nature of your personal
relationship with the defendant?
A. I would say the whole time that we were dating he was also my boss at work, which created some awkward situations. I would say in our personal…
— BitMEX Research (@BitMEXResearch) October 11, 2023

A $3.5 million loan went through Caroline for a "gambling company that some people at FTX wanted to start"

A. I received one loan of $3.5 million.
Q. What was that loan for?
A. It was for a gambling company that some people at FTX wanted to start, and they asked if they could…
— BitMEX Research (@BitMEXResearch) October 11, 2023

SBF really valued the loyalty of Ryan Salame.

A. Yeah. I learned that Alameda had loaned, I think it was around $35 million to Ryan Salame as well.
Q. What, if anything, did the defendant say to you about Ryan Salame as an employee?
A. He said that he really valued Ryan for his…
— BitMEX Research (@BitMEXResearch) October 11, 2023

Caroline was concerned about how some may view the loans

Q. Why do you think that those loans to insiders might raise concerns with lenders?
A. For one thing, because I didn't think that they would — Alameda would easily be able to get the loans back if we needed to, and for…
— BitMEX Research (@BitMEXResearch) October 11, 2023

In late 2021, SBF wanted to borrow more

Q. Who if anyone, as far as you know, was directing Alameda's strategy with respect to borrowing in late 2021?
A. Sam was directing us at the time to borrow as much money as we could from whatever sources we could find at whatever terms we…
— BitMEX Research (@BitMEXResearch) October 11, 2023

By around the end of end of 2021, Alameda had borrowed around $9.4 billion from third parties (Excluding the FTX debt). These loans could be recalled at any time. Based on the transcript below, it seems almost all of this funding came from Genesis Trading.

Caroline talked about… pic.twitter.com/Ytc7zACT0T
— BitMEX Research (@BitMEXResearch) October 11, 2023

In May 2022 Caroline shared a document with SBF, where she shared concerns about risks at Alameda. SBF then asked if his own equity in FTX was included in Alameda’s balance sheet as an asset.

Q. Let's turn to page 2, the end of this document. I want to direct your attention to…
— BitMEX Research (@BitMEXResearch) October 11, 2023

SBF Trial Day 4 – Gary Wang testimony

SBF Trial Day 4 – Gary Wang testimony

FTX's published insurance fund number was fake and FTX's published insurance fund balance was produced by a random number generator!

Transcript extracts below

Q. And the number here, what is the size of the backstop fund listed?
A. Five…
— BitMEX Research (@BitMEXResearch) October 6, 2023

SBF Trial – 10th October 2023 – Gary Wang Testimony Continued

Please see some interesting snippets below:

1. Some pretty weak points from the defense, on cross examination, the defense wanted to point out that Wang couldn’t remember exactly which screen in his set up that SBF…
— BitMEX Research (@BitMEXResearch) October 10, 2023

SBF Trial Day 4 – Gary Wang testimony

Our Korean friend "Seyoun Charles"

In Nov 2022, an FTX account with a negative $8 billion balance was referred to by SBF as “our Korean friend”. The name on this account was "Seyoun Charles", with the email "seyouncharles88@gmail.com". The…
— BitMEX Research (@BitMEXResearch) October 6, 2023

We have been up all night crunching the numbers and doing the maths. We finally figured out how to calculate FTX's REAL trading volume numbers https://t.co/bJEHcPbNmr pic.twitter.com/Bwpr9qEqVB
— BitMEX Research (@BitMEXResearch) October 7, 2023

SBF Trial Day Three Summary Witness Yedidia

SBF Trial Day Three Summary

Witness Yedidia

FTX employee Yedidia explained that fiat deposits to FTX were sent to a bank account in the name of Alameda. An Alameda account at FTX, fiat@ftx.com, therefore had a balance corresponding to net customer deposits, money Alameda owed… pic.twitter.com/Z9cjOkRxE6
— BitMEX Research (@BitMEXResearch) October 6, 2023

Last last witness of day three was Gary Wang, FTX CTO. We have summarised the key parts below:

Q. Did you commit financial crimes while working at FTX?
A. Yes.
Q. What types of crimes did you commit?
A. Wire fraud, securities fraud, and commodities fraud.
Q. Did you commit these…
— BitMEX Research (@BitMEXResearch) October 6, 2023

"it had the ability to place orders on the platform slightly faster than other market makers on the platform"

🤔
— BitMEX Research (@BitMEXResearch) October 6, 2023

Version with links only:

Full transcripts to the days with the SBF cross-examination
https://twitter.com/BitMEXResearch/status/1719473668177211783
https://twitter.com/BitMEXResearch/status/1719124563181629580

Our prediction
https://twitter.com/BitMEXResearch/status/1712437163181089190

SBF on Cross Examination
https://twitter.com/BitMEXResearch/status/1719162336584323340
https://twitter.com/BitMEXResearch/status/1719161569869766776
https://twitter.com/BitMEXResearch/status/1719160817340297254
https://twitter.com/BitMEXResearch/status/1719159448483058024

SBF Trial 25 October 2023
https://twitter.com/BitMEXResearch/status/1717339485774504123

The story of the Genesis Global Trading loans to Alameda Research
https://twitter.com/BitMEXResearch/status/1715696974383480850

After the testimony on 16 October 2023, SBFs defence team asked if he could have a half day tomorrow to sort out SBF’s access to Adderall. The court rejected the request.
https://twitter.com/BitMEXResearch/status/1714079768474161238

SBF Trial – BlockFi CEO testimony (Zac Prince) – 13 Oct 2023
https://twitter.com/BitMEXResearch/status/1713213088822923681
https://twitter.com/BitMEXResearch/status/1713213641485344783
https://twitter.com/BitMEXResearch/status/1713213808833880186

SBF Trial Day 4 – Gary Wang testimony
https://twitter.com/BitMEXResearch/status/1710416199115247926
https://twitter.com/BitMEXResearch/status/1711887578687742024
https://twitter.com/BitMEXResearch/status/1710435056466976869
https://twitter.com/BitMEXResearch/status/1710579354202144991

SBF Trial Day Three Summary Witness Yedidia
https://twitter.com/BitMEXResearch/status/1710257429500276908
https://twitter.com/BitMEXResearch/status/1710264034690318529
https://twitter.com/BitMEXResearch/status/1710269177494155696

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