GM Readers. Your daily dose of BitDegree insights is ready š
Today's selection:
- š»Secret Recording Shows Staff's Reaction
- š°Bite-Sized News
- šSelected Meme of The Day
SECRET RECORDING
Friday means the end of a working week. Time to get some rest from the ongoing, tumultuous SBF trial.
But before thatā¦ let's see what are the latest developments. And they are ratherĀ explosive.
In the latest court proceedings on October 12, former Alameda CEO Caroline Ellison took the stand for the third day, culminating in the presentation of a recorded meeting that occurred on November 9, 2022, in Hong Kong.
This meeting, attended by nearly half of Alameda's staff, around 15 people, became the pivotal moment in which Ellison candidly discussed the unfolding situation with the cryptocurrency exchange.
This admission was accompanied by earthquakeish insights into Alameda's financial dealings with FTX.
We know about it from Christian Drappi.
On October 12, Christian Drappi, a former software engineer at Alameda, took the stand as a government witness in the ongoing criminal trial against Bankman-Fried.
Drappi's testimony included the playing of a recording of the Hong Kong meeting. Rick Best, a trader who had recently joined Alameda, was seated directly to Ellison's right, secretly recording the meeting's audio.
that recording is truly the embodiment of a 'fire mixtape'
The courtroom was filled as Drappi described Ellison's demeanor that night as "sunken." He noted that she did not display confident body language.
On the recording, Ellison acknowledged that Alameda had borrowed a substantial amount of money, which was used for investments. However, as cryptocurrency prices began to decline, FTX faced a shortfall in user funds. Users initiated fund withdrawals, and FTX realized it would be unable to continue operating.
Drappi can be heard on the recording asking about FTX's plan to reimburse customers. Ellison, who has pleaded guilty to fraud charges and is cooperating with prosecutors, responded that the company planned to raise funds to fill the gap. Drappi expressed concern about this response, as raising outside funds for this purpose was not a typical practice.
During the meeting, Drappi asked Ellison if Alameda's loans were collateralized through the spot margin group. She confirmed that they weren't, and Drappi remarked, "That seems pretty bad."
Just imagine the feeling of literally being the good guy in this story from the very beginning.
Drappi inquired if the situation was a "YOLO thing." He wanted to ensure that the decision to use FTX customer funds was a deliberate one.
At one point in the recording, Ellison giggled, which Drappi described as her "nervous laughter," a habit he had observed previously.
When asked by a staffer whose idea it was to use FTX customer funds to cover Alameda's loan losses, Ellison responded with, "Um, Sam, I guess," and giggled.
Drappi resigned within 24 hours of these revelations.
Drappi noted that Bankman-Fried maintained direct communications with Alameda employees through Signal. He played a role in major trades and had access to Alameda's internal interface, known as "pointer," as well as the firm's back-end data.
In terms of trading, Drappi cited an instance where a senior trader mentioned that "Sam wanted to do it," referring to a trade involving selling Japanese bonds and buying the currency. Drappi indicated that he conversed with Alameda traders on a daily basis.
On the night prior to the all-hands meeting, November 8, Drappi was in the office along with Ellison and two traders, Tony Qian and David Nyeste. Around 11 p.m., Bankman-Fried posted a tweet announcing that Binance was acquiring FTX, potentially saving the exchange.
Drappi described the response in one word: "shock."
However, the agreement with Binance was nonbinding, and on November 9, the rival exchange withdrew from the deal. CEO Changpeng Zhao of Binance stated that FTX's "issues are beyond our control or ability to help." Two days later, FTX declared bankruptcy.
TL;DR:Ā In the ongoing trial of former FTX CEO Sam Bankman-Fried, former Alameda CEO Caroline Ellison's third-day testimony, featuring a recorded meeting held on November 9, 2022, in Hong Kong, revealed explosive insights into the financial dealings between Alameda and FTX. Christian Drappi, a former Alameda software engineer, provided witness testimony and shared this pivotal meeting's content, shedding light on financial missteps and decisions that led to FTX's bankruptcy.
SELECTED MEME OF THE DAY
