Thai sex workers, Chinese bribes, and Signal messages: SBF live trial updates

Former Alameda co-CEO Caroline Ellison is back on the stand to continue testimony Wednesday morning


Artwork by Crystal Le


FTX co-founder Sam Bankman-Fried faces seven federal charges in a criminal trial taking place in Manhattan. The former crypto exchange exec is accused of misappropriating billions of dollars of customer funds for real estate, donations, political contributions and investments. 

The current state of play: Caroline Ellison continues her testimony, after an opening day from the prosecution’s star witness. While there were a few revelations from Ellison — including a look into SBF’s presidential dreams — her testimony from the first day was mostly focused on spreadsheets.

Looks like everyone is tired — but not asleep! — from a full day of testimony from former Alameda co-CEO Caroline Ellison. 

Judge Kaplan interrupted Mark Cohen, Bankman-Fried’s defense attorney, just five minutes into his cross-examination.

The judge concluded proceedings around twenty minutes before the normal stopping time, saying that it’s “been a long day.” Cohen chuckled at the judge’s characteristic quip, as did the gallery.

The judge added “I have a feeling” that if court adjourned for the day, Cohen would be happy and everyone would be a whole lot “fresher” the next morning. 

Once the jury was dismissed, Judge Kaplan spoke to both the prosecution and defense. He moved to grant the government’s motion to block the defense from bringing up SBF’s $500 million Anthropic investment. If you need a refresher — a lot happened today! — scroll down to read our update from 10:10 am ET.

Ellison is set to once again take the stand on Thursday, with Cohen resuming his cross-examination. 

Before the government and the defense swapped the podium, lead prosecutor Danielle Sassoon prompted Ellison to elaborate on an $800 million loss that FTX sustained in 2021 while trading BTMX. The massive loss was due to a margin system malfunction, according to Ellison.

When this happened, Bankman-Fried said Alameda needed to take the loss because he “didn’t want it on FTX’s balance sheet.”

And like the prosecution did with FTX and Alameda co-founder Gary Wang previously, Sassoon teased out the details of Ellison’s cooperation agreement with the government, her guilty plea, and the sentence she is facing for the jury to hear.

She said “the maximum is 110 years in prison,” and on top of that, Ellison will have to make restitution to the victims of the FTX collapse. No dollar amount was placed on those supposed restitutions.

4:05 pm ET: Caroline Ellison continues testimony against Sam Bankman-Fried

Correspondence between the former Alameda CEO and the former FTX CEO was shown in the courtroom today. The prosecution specifically showed messages exchanged on Nov. 7, just days before the exchange filed for bankruptcy. 

Prosecutors showed a message from Ellison that essentially said, “if things get a lot worse, I don’t think I’m going to handle it well.”

To which, Bankman-Fried responded, “Wow. Uh, congrats?” because “shit’s exciting.”

The leaking of the Alameda balance sheet, as most people familiar with the FTX bankruptcy know, caused a bank run on FTX. This reportedly led SBF to direct Ellison to “liquidate Alameda’s positions” and send the money to FTX in a totally normal, kosher business move (not).

When former FTX chief of engineering, Nishad Singh, flagged the hundreds of millions of withdrawals on FTX, Bankman-Fried allegedly responded, “Oof.” We couldn’t say it better ourselves.

Ellison said she was “terrified” at this point, adding that she had harbored fears of this happening for months.

“I continued to live with the constant worry of people finding out,” that Alameda and FTX were using customer funds, Ellison told the prosecutors. 

As the prosecutors and Ellison recounted the collapse of both FTX and Alameda, Ellison seemed to be emotional. 

“I felt a sense of relief” that she didn’t have to lie anymore, she told prosecutors. 

She added that she did feel bad for the “people we had deceived.” But, since we’re in the spirit of airing all of the truths, it’s only fair to point out that Ellison did not walk away from Alameda or FTX until the collapse. She did, however, speak to prosecutors and law enforcement in December 2022, following the bankruptcy.

Also in December, Ellison pleaded guilty to federal charges and was released on bail.

Oh, and a juror in the back row fell asleep…again…earlier this afternoon. Not even spicy allegations can keep them awake!

1:00 pm ET: Bribes to the Chinese government?

Caroline Ellison’s testimony hit on a few things, including bribes to the Chinese government, Thai sex workers and…Snapchat?

Looks like we did indeed get away from the spreadsheet questioning.

Ellison testified that she, very helpfully, kept an ongoing list called “Things Sam Is Freaking Out About” in a Google document. Included in that list was hedging, raising money from Saudi Crown Prince Mohammed Bin Salman, getting more capital from BlockFi (more on that in a second), and getting regulators to crack down on Binance. 

Ellison told the court she was blamed by Sam Bankman-Fried for not hedging more on particular trades in the beginning of 2022, which he believed was the main cause of Alameda’s bad financial condition. He said this to her “loudly and strongly” in an in-person conversation, making her cry, she said on the stand.

“I started crying and I had trouble continuing the conversation,” Ellison said, adding that the conversation happened in their shared apartment where they lived in the Bahamas with other employees.

She also said that she was “careful about not saying [anything] in too explicit language,” because there was a fear that written communication could be used in a “court case.” Oops!

Read more: ‘Bombshell’ testimony and ‘hard to watch’ cross-examinations: A firsthand account of the SBF trial

Moving back to BlockFi…SBF wanted to acquire the now defunct lender to move its assets onto FTX, as well as receive more loans from it. He also apparently had his eyes on Snapchat. 

And those Thai sex workers? Their accounts were included in one of SBF’s strategies to unfreeze Alameda funds held on Huobi and OKX. These funds were frozen by Chinese government officials as part of a money laundering investigation.

Ellison alleges that SBF and others elected to send anywhere from $100 million to $150 million to various crypto addresses, believed to be tied to Chinese officials. She called this a bribe earlier in her testimony, a comment stricken from the record by Judge Kaplan. The judge also instructed the jury to disregard this comment.

Onto the hopes of an MBS cash injection. Long story short, it never happened, but it was meant to alleviate the heavy debt that Alameda was incurring from open term loans from companies like Genesis and personal loans to Gary Wang, Nishad Singh and Bankman-Fried himself. 

Also according to Ellison, his goal was to essentially rat Binance out to regulators in the US for its supposed shady practices, thereby quickly growing FTX’s market share. 

Live from the courtroom: The prosecution showed a few thousand spreadsheets, leading Judge Lewis Kaplan to remark, “Microsoft stock must be plunging.”

The prosecutor in charge of the direct questioning, Danielle Sassoon, was also chastised by Judge Kaplan for being “a little repetitive” as the courtroom broke for lunch this afternoon.

Outside of the courtroom, Judge Kaplan ruled on an Oct. 2 motion from the defense as Caroline Ellison took the stand Wednesday. Kaplan’s ruling, which focused on what could be brought up during the ongoing trial, was a mixed bag for SBF’s team. 

The judge expressed concern about bringing up the lack of crypto regulation in the United States, saying that it could confuse the jurors — perhaps a fair point in a trial where multiple jurors have fallen asleep and we’re barely on week two. 

He also said he wouldn’t reconsider a block on evidence connected to asset recovery in the FTX bankruptcy.

SBF’s team can, however, bring up the charity donations. The court will rule on specific questions “should controversy arise.”

10:10 am ET: Caroline Ellison returns to the stand

Former Alameda co-CEO Caroline Ellison is back on the stand to continue testimony Wednesday morning.

It wouldn’t necessarily be a surprise if Ellison took up the majority of the day. The defense and the prosecution both have multiple lines of questioning to pursue with the former executive and former SBF love interest. 

Aside from Ellison, Judge Lewis Kaplan is expected to rule on two motions — Alameda’s use of lawyers in its auto-deletion policies. 

The second concerns one of SBF’s investments into Anthropic AI — a company that later ended up getting a multi-billion investment promise from Amazon

The prosecution has already argued that a line of questioning related to the investment isn’t relevant to the case, because alleged investments — even successful ones — made with customer money (and without the customers knowing, mind you) are still…bad. The decision now rests with Kaplan and his gavel. 

The defense, however, believes that the growth of the investment gives the jury some insight into SBF’s investing strategy, with a potential focus on how the investment could return money to customers. Bankman-Fried’s more successful ventures have not really been mentioned throughout the testimonies in the trial so far. 

Before we dive into a fresh day of the trial, let’s go over some of the highlights from Tuesday. 

Ellison said she didn’t really feel qualified to be Alameda’s co-CEO, but no biggie because she still reported to SBF. 

She made a $200,000 salary — though with a sweet $20 million bonus in 2021.

SBF pushed Ellison and Alameda to “borrow as much money as we could,” which led to roughly $10 billion in outstanding third-party loans by mid-2022. 

Bankman-Fried also believed that political donations were a good use of [mostly customer] money, and said that “relatively small amounts of money” could be used for influence. An example used at the trial was the cool $10 million donated to now-President Joe Biden.

Oh, and we learned that SBF believed he had a 5% chance of becoming president.

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