The ongoing trial against Sam Bankman-Fried (SBF), former founder of the FTX crypto exchange, coupled with the testimonies of Caroline Ellison, the ex-CEO of Alameda Research and his former romantic partner, has unveiled a slew of crazy stories and intrigues. Given the rapid pace and depth of these developments, we’ve distilled the most jaw-dropping moments.
SBF And Ellison’s Manipulated Bitcoin Price
In a sensational revelation, Caroline Ellison admitted that there was a coordinated effort between her and SBF to maintain Bitcoin’s price below $20,000. “Keep selling BTC if it’s over $20K,” Ellison allegedly noted from one of their conversations. The motivation behind this move, according to Ellison, was to entice investors by selling equity, thus raising more funds.
FTX’s Bribery In China
An equally serious allegation against Bankman-Fried is the alleged payment of $100 million in bribes to Chinese officials to release $1 billion in funds from Alameda Research. Ellison testified about a heated debate with employees in 2021 about how to release the $1 billion held across two Chinese crypto exchanges.
Alameda endeavored for a year to unfreeze the funds. Ellison also revealed that they used the identities of “Thai Prostitutes” in a bid to extract frozen funds from the Chinese exchange OKex. Ultimately, the attempts culminated in a pivotal moment when Bankman-Fried and his team discovered that a payment of $100 million to two crypto wallets could facilitate their release.
The ensuing discussions about making the payments took a contentious turn when an employee, Handi, ardently objected, prompting a heated reaction from Bankman-Fried. Handi, a then-employee whose father was affiliated with the Chinese CCP, encountered a chilling stare from SBF, followed by the harsh exclamation, “shut the **** up.” After Handi exited the company, dark humor unfolded in a Signal chat between SBF and Ellison, jesting, “Hope her dad doesn’t turn us in LOL.”
A Scam Targeting Saudi Royalty
During her testimony, Ellison informed jurors that one method SBF contemplated for repaying FTX customer accounts involved soliciting funds from the Saudi Crown Prince. Precise details are not known.
Ellison Was Forced To Drive A Honda Civic
Sam Bankman-Fried, always attuned to the nuances of his public image, intentionally cultivated a persona that some described as a ‘disheveled nerd’. Caroline Ellison’s testimony delved into this, suggesting that SBF’s carefully curated image wasn’t just about personal branding—it was a strategic move to appeal to investors and attract customers.
Ellison further disclosed that during her initial days at Alameda, both she and SBF sported luxury vehicles, courtesy of the company’s payroll. However, in line with his image of frugality and modesty, Sam later made a decision to downgrade their vehicles. He opted for a Toyota Corolla, while Ellison was assigned a Honda Civic. Prominent X account, Autism Capital, commented, “Poor Caroline was forced to drive a Honda because Sam was forced to drive a Corolla.”
Plotting Against Binance
Ellison disclosed that a major focus for SBF and FTX last year was to encourage regulatory authorities to take stringent actions against Binance. The intention behind this maneuver was to boost FTX’s position in the market. Prosecutors found out that “getting regulators to crack down on Binance” was on Ellison’s to-do list, however, she remained tight-lipped about the specifics of how SBF aimed to achieve it.
Massive Losses Due To Security Lapses
A shocking claim from former engineer Aditya Baradwaj details how Alameda Research allegedly lost $190 million through avoidable blunders and lackadaisical security practices.
The most striking case involved an Alameda trader who inadvertently activated a malicious link found atop Google Search results. This mishap occurred while the trader was validating a decentralized finance transaction, ultimately resulting in a loss exceeding $100 million. In another worrying episode, Alameda experienced a $40 million setback from yield farming on an unverified blockchain platform.
Ellison’s Mystery Gambling Venture
Caroline secured a substantial loan of $3.5 million, intended to launch a gambling venture that others proposed to establish under her name, leveraging her non-affiliation with FTX. The lingering question remains: what precisely was the goal of this company?
At press time, the token of the crypto exchange FTX, FTT was trading at $1.0441.
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