SBF, Ellison Thought Bitcoin Would’ve Crashed More As FTX Caved

Internal chat logs show FTX insiders discussing the price of bitcoin as the FTX scandal first sent shockwaves through crypto markets


FTX’s Sam Bankman-Fried | Blockworks exclusive art by Axel Rangel


In the FTX saga’s earliest days, disgraced co-founder Sam Bankman-Fried was actually surprised it hadn’t impacted bitcoin more.

A complaint filed by the Commodity Futures Trading Commission (CFTC) on Wednesday offers a glimpse into messages shared between insiders as the platform collapsed last month.

The CFTC states that “on the evening of Nov. 6, as they monitored and reacted to the movements in FTT prices and the contagion effects on the digital asset market more broadly,” an unnamed Alameda executive said:

“I’m surprised BTC isn’t down more,” to which former Alameda Research CEO Caroline Ellison responded: “me too.”

Bankman-Fried chimed in: “yea me 3 [sic].”

While bitcoin only faltered 2% around the time of those messages, more than $230 billion was eventually wiped from collective crypto market values in the following days, a 20% reduction.

Bitcoin itself lost more than $100 billion from its market cap in the week leading up to FTX filing for bankruptcy. BTC tanked up to 25%, from $21,300 to below $16,000 at its worst on Nov. 10.

The native exchange token of FTX, FTT, was however completely obliterated, sinking more than 90% in under three days. Alameda Research was reported to have outsized exposure to FTT (and similarly illiquid tokens) on its balance sheets in the weeks leading up to FTX’s collapse.

Bitcoin fell harder following Bankman-Fried’s disbelief on Nov. 6

FTT’s death spiral followed Binance CEO Changpeng Zhao tweeting his company would liquidate its holdings, estimated to be worth more than $500 million at the time, to reduce risk associated with FTX.

“At this time, bitcoin market prices, including on US exchanges, had indeed begun to decline, likely as a direct or indirect result of the events described herein,” the CFTC said.

Ellison, alongside former FTX and Alameda chief technology officer Gary Wang pleaded guilty on Thursday to multiple counts of fraud and conspiracy. Both are reported to be cooperating with authorities moving forward, now out on bail. 

Meanwhile, Bankman-Fried is expected to be imminently extradited to US, where he’ll face his own mammoth eight-count federal criminal indictment.

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