The testimony from Alameda Research former CEO Caroline Ellison in Sam Bankman-Fried’s trial was apparently just as consequential as it was expected.
In her three days of testimony, Ellison made several disclosures. One of the most explosive was that Alameda Research bribed a Chinese government official to unlock $1 billion of its frozen funds.
The money was on other crypto exchanges that were connected to money laundering. To try to regain access to funds, Alameda sent a $150 million payment to the unidentified official.
At first, they tried to solve things via a lawyer, but that was ‘unsuccessful’. They also tried to use the IDs of Thai prostitutes – yes, really – to create accounts on those exchanges in a bid to get those funds back.
Finally, they resorted to the bribe.
Axios reported:
“A former Alameda trader named ‘Handi’ objected to the bribe when it was initially suggested; her father was a government official, Ellison said. When Handi became overly vocal about her concerns, SBF ‘yelled at her to shut the f**k up’, Ellison said.”
The Sam Bankman-Fried defense tried to dismantle her testimony, as she insisted that the ‘crypto bro’ was behind the misuse of billions of dollars in customer money from his FTX exchange.
The New York Times reported:
“Over about five hours of cross-examination, Mr. Bankman-Fried’s defense lawyer, Mark Cohen, questioned Ms. Ellison about her decision to cooperate with prosecutors in return for leniency. He also asked her about a document she sent to employees at Alameda Research, the crypto trading firm she ran for Mr. Bankman-Fried, which had painted a rosier picture of the firm’s finances than she had described in private.”
Ellison stood to her previous testimony that she followed orders from Mr. Bankman-Fried about letting Alameda tap into FTX customer funds.
Bankman-Fried, she also stated, knew for months that Alameda’s finances were in a precarious state.
“Ms. Ellison also said Mr. Bankman-Fried got more involved in Alameda by spring 2022 and that he decided to tap into FTX customer money to pay back lenders of the trading firm.
In one conversation on Wednesday, Danielle Sassoon, an assistant U.S. attorney, said she noticed Mr. Bankman-Fried had ‘laughed, visibly shaken his head, and scoffed’ at various points during Ms. Ellison’s testimony. Ms. Sassoon speculated it might be ‘having a visible effect on her’, according to a trial transcript.
Judge Lewis A. Kaplan, the judge presiding over the trial, said he didn’t see what Ms. Sassoon had referred to so he wouldn’t make any comments to the jury. But the judge told Mr. Bankman-Fried’s lawyers to privately tell their client that if he was making any visible expressions, he should stop.”
Ellison was followed on the stand by Christian Drappi, a software engineer who offered the ultimate inside view of the room where the infamous all-hands meeting last November, where Ellison informed her team of what had gone down.
Sitting on a beanbag chair, Ellison let her employees know there that FTX and Alameda had been inappropriately co-dependent for a long time.
For the first time, the actual audio from the meeting entered the public record.
Slate reported:
“The first clip solely featured Ellison, who kicked off the meeting by laying out the ‘basic story here’: ‘Starting last year, Alameda was kinda borrowing a bunch of money via open-term loans and using that to make various illiquid investments’ — referring to the startup investments SBF had purportedly ordered to be carried out with customer money. Between the extant loans, the announcement from Binance (which had dropped its FTX bid earlier in the day), and the still-smarting crypto crash from earlier in the year, FTX was ‘not going to be able to meet, like, the withdrawal pressure’ that it now faced as worried clients begged for their money back.
[…] The second clip featured Christian Drappi himself, asking his boss whether FTX/Alameda planned to pay off those obligations. Ellison likewise didn’t sound too confident here, stating that this problem had lingered for a while, thanks to the Alameda lenders who’d begun recalling their loans in the summer. ‘Our plan to wait for several months and for market environments to improve did not work out’, Ellison responded in part, giggling afterward.
The third clip also featured Drappi, talking through his understanding of the complex situation. ‘The biggest factor is the loan we have in FTX’, he reasoned, also realizing that, thanks to its special privileges with the sister exchange, Alameda hadn’t put up any substantive collateral, as a typical customer would have to. ‘That seems pretty bad’.
The fourth clip consisted of Ellison getting into more nitty-gritty deets. ‘Our loan from FTX was used to repay’ Alameda’s other lenders, she expounded, and was ‘used mostly to buy illiquid assets’. […] Ellison giggled while delivering this verbal accounting, which, Drappi clarified, he understood from his personal experience with Ellison to be ‘nervous laughter’.”
In the fifth clip, Ellison acknowledged that she had talked about [the investments] with SBF.
Finally, in the sixth clip, Ellison told a colleague that it’d been Sam who’d approved all the poor investments.
Read more about the SBF trial:
The post Sam Bankman-Fried Trial: Alameda Bribed Chinese Official, SBF Told Objector to ‘Shut the F*** Up’ – Recordings of Meeting of CEO Ellison With Team Is Played for the First Time appeared first on The Gateway Pundit.