![The Most Outrageous Confessions by Caroline Ellison in the Case Against SBF The Most Outrageous Confessions by Caroline Ellison in the Case Against SBF](https://i0.wp.com/cryptopotato.com/wp-content/uploads/2023/10/ftx_court_cb.jpg?w=896&ssl=1)
[ad_1]
TL;DR
- SBF Trial reveals manipulation of Alameda’s funds, resulting in $10 billion in outstanding loans.
- Scheme involving frozen Chinese government funds explored, including negotiation, using crypto addresses, and bribery.
- Ellison exposes attempts to use Saudi Crown Prince’s money, image concerns, doctored balance sheets, and FTX’s insolvency, raising industry regulatory and investor confidence questions.
The SBF Trial just got crazier this week, as a lot of unexpected things were thrown into the Jury’s desk, including Chinese government bribes, enticing the Saudi Crown Prince to invest in Alameda, Thai prostitutes and orgies, a scheme to suppress the price of BTC, and much more.
That’s a lot to unpack in just a few days. We have piled up the latest and most important developments and updates so you can keep track of everything. We’ll start with Caroline Ellison, SBF’s ex-girlfriend, who took the witness stand twice this week.
Here are the most outrageous confessions by Ellison in the case against SBF.
SBF Told Ellison to Lie and Mislead Investors
Ellison, former Alameda CEO, said that while she had a business executive position at the trading firm, it was Sam who specifically directed her on how to use Alameda’s funds, move capital, and talk to institutions and investors. In other words, Sam was the mastermind backstage.
Ellison stated that Sam pressured her and the Alameda team to “borrow as much money as we could,” resulting in $10 billion of outstanding third-party loans by mid-2022, the beginning of the end for FTX/Alameda.
When things started falling apart, Ellison said she felt a “sense of relief as I didn’t have to lie anymore.” According to her testimony, Ellison warned Sam about the state of Alameda’s balance sheets and not hedging more on specific high-risk trades in 2022.
Allegedly, Ellison was being “too careful” not to tell investors anything too specific or explicit as she feared written communication could be used in a court case.
Chinese Official Bribes
In 2021, the Chinese government froze $1B of Alameda’s funds on Huobi and OKX. According to Caroline, SBF and his team were trying to figure out a way to access the funds, so they came up with three possible solutions:
- Recur to lawyers to negotiate with Chinese officials and get the funds back.
- Use crypto addresses belonging to Thai prostitutes to recoup the funds through several strategies.
- Resort to bribe Chinese officials with $100 million, an idea suggested by former Alameda employee David Ma.
The order to bribe Chinese officials, which Ellison states she didn’t know to whom those accounts belonged, was ordered by Trabucco and Bankman-Fried in a Signal conversation that was later deleted (by Sam’s orders).
More testimonies from Ellison: One Alameda employee, Handi Yang, opposed the decision before it was executed as her father was a Chinese official. Sam quickly responded by telling her to “shut the fuck up.” As a result, Handi quits, and a month later, Sam Trabucco —whose whereabouts are still unknown to this day— asked in a Signal chat: “Did Handi’s father immediately turn us in or something?” to which SBF laughed it off as a response.
The Saudi Crown Prince and the Messy Hair
On her second testimony day, Ellison revealed how Sam tried to pay FTX customers by raising money from Saudi Crown Prince Mohammed bin Salman.
Regarding Alameda, Sam commanded Ellison to pay lenders using “FTX’s line of credit” —in other words, using FTX’s customer funds, a vicious spiral of debt and misuse of funds.
There were also remarks about Sam’s image. As per her statements, Sam was always worried about how people would perceive him, and Sam’s hair was “very valuable” to him as it was a significant part of the narrative he was trying to push, alongside the crypto community’s most famous Corolla, which he used as a PR stunt while living in a $30M+ penthouse.
Doctored Papers & Balance Sheets
At the brink of chaos, lenders and investors were starting to ask for Alameda’s balance sheet. Ellison revealed she heavily doctored the firm’s original balance sheet and created seven different versions with inflated numbers.
In reality, Alameda’s net asset value barely reached $6 billion on paper, having liabilities north of $14.9 billion. “I didn’t want to be dishonest, but I also didn’t want them to know the truth,” Ellison stated.
Moreover, lead prosecutor Danielle Sassoon pulled a Tweet from SBF on June 27th, 2022, where he stated, “Backstopping customer assets should always be primary. Everything else is secondary.”
Sasson asked Ellison if, at the time of this tweet, FTX was solvent to backstop customers, to which she responded, “No.” The truth is that FTX had around $6.9B in liquid assets, while total deposits on the exchange amounted to $15 billion.
What’s Next?
This trial could have massive implications for the cryptocurrency space, specifically on the regulatory front and the loss of investors’ confidence in the industry.
Ellison, who pleaded guilty while his ex-boyfriend pleaded not guilty and free of all guilt and accusations, has become the government’s star witness. But Ellison is not the only executive that has turned on SBF. The list is Gary Wang, Rayan Salame, Nishad Singh, and Ramnik Arora.
SBF is currently facing more than 110 years in prison for seven charges of federal crimes. The cherry on top is that SBF also believed he had a 5% chance of becoming president. Not even a Hollywood script would have this level of creativity.
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO50 code to receive up to $7,000 on your deposits.
[ad_2]
Source link