After months of excruciating wait, the FTX depositors are fast narrowing down on how their funds were commingled with Alameda Research before disappearing. On October 26, former FTX boss Sam Bankman-Fried (SBF) testified in court before Judge Lewis Kaplan with the jury absent. The SBF testimony came after the prosecutors presented their witnesses including former SBF colleagues like Caroline Ellison, the former CEO of Alameda Research who pleaded guilty and Agreed to work with the government.
SBF Speaks on His Innocence and Over 100 Years in Prison
With the collapse of FTX and Alameda Research being a high profile, SBF crafted his words carefully during Thursday’s testimony to avoid nailing his guilt. Moreover, his reactions to the case have put him under a tight spotlight, which legal experts have described as ‘diarrhea of the mouth’. As a result, SBF worked closely with his team of lawyers led by Mark Cohen to ensure that he does not deviate from the already established information that has been provided by current FTX Chief Executive Officer John Ray III.
When asked whether he had discussed the $13 billion hole, which was highlighted by the accounting professor from the University of Notre Dame Professor Peter Easton, with Eliison, SBF replied that he does not recall such a conversation on the Signal app.
AUSA: Did you have discussions about a $13 billion hole?SBF: I don’t recall such conversations.AUSA: You think it should be preserved?SBF: It depends. AUSA: Adam Yedidia quoted you that preserving Signals would be all downsideSBF: I don’t recall that
— Inner City Press (@innercitypress) October 26, 2023
Notably, SBF told the court that he did not instruct any of the employees to have a conversation on Signal, where most of the messages are believed to have been deleted following the collapse. Instead, SBF told the court that former chief regulatory officer Dan Friedberg and General Counsel for FTX US Ryne Miller directed which messages to retain on the signal channel.
As for the customers’ funds, SBF said he thought it was not illegal to have Alamada Research as the recipient. Instead, SBF highlighted that FTX did not have a designated bank account and was in the process of establishing with Silvergate. Worth noting that the prosecutors have established that Alameda Research was used to make political donations among other strategic investors in real estate, and startup ventures.
Earlier in Ellison’s testimony, she told the court that FTX customer deposits were directed to bank accounts controlled by Alameda Research from 2020 through 2022.
AUSA: When did FTX receive money into Alameda’s bank accounts?Ellison: 2020. And into 2022. North Dimension was the name I was aware of.AUSA: How much FTX money got deposited with Alameda?Ellison: Ten to twenty billion dollars.
— Inner City Press (@innercitypress) October 10, 2023
The FTX customers’ funds have already been spotted being deposited into Binance, in what is believed to be a liquidation process. The liquidation process is expected to take a long time since the restructuring process is still ongoing. Nonetheless, the possibility of FTX reopening its business to help maximize funds recovery remains open.
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