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Today's selection:
- šCaroline Ellison Spills Some More Beans
- š°Bite-Sized News
- šSelected Meme of The Day
SOME EXPLOSIVE ALLEGATIONS
The trial continues. And together with itā¦ some bombshell allegations. Things looked bad, now they look even worse.
After two days of extensive testimony lasting over nine hours, Caroline Ellison emotionally recounted the final days of the cryptocurrency empire they had jointly built. Aparently, for Ellison, it was also oddly liberating.
She described it as "the worst week of my life," yet paradoxically, she told Bankman-Fried that it was "the best mood I've been in in a year."
Quick reminder: She served as Alameda Research CEO, and it was the crypto hedge fund closely linked to FTX, a trading platform run by Bankman-Fried.
Prior to the collapse, FTX owed its clients $12 billion, but it only held $4 billion in client assets. Prosecutors claimed that the missing $8 billion had been siphoned off by Alameda to cover debts and provide loans to Bankman-Fried and associates.
Bankman-Fried faces seven counts of fraud and conspiracy, to which he has pleaded not guilty. The defense commenced cross-examination of Ellison on Wednesday, although proceedings were cut short by Judge Lewis Kaplan, who suggested adjourning early due to the lengthy day. The cross-examination will continue today.
Over the course of two days, Ellison presented a narrative in which Bankman-Fried had directed criminal activities within his inner circle. Despite her role as CEO of Alameda, she asserted that Bankman-Fried was actively overseeing both Alameda and FTX.
Ellison and other witnesses maintained that Alameda, engaged in high-risk crypto trading, had an undisclosed, virtually limitless line of credit with FTX, tapping into funds belonging to unsuspecting customers who had deposited money on the platform.
The evidence presented thus far suggests that FTX's creation in 2019 was primarily driven by Bankman-Fried's desire for a significant source of capital beyond the third-party loans that Alameda depended on.
Ellison also shared details from her personal to-do lists, including one titled "Things Sam is freaking out about," which she updated regularly to monitor Bankman-Fried's preoccupations. These entries included plans like:
- Get regulators to crack down on Binance;
- Attract customers from FTX's major rival;
- Buy SNAP, the parent company of Snapchat;
- Raising capital from Saudi Arabia's Crown Prince Mohammed bin Salman.
In a surprising revelation, Ellison disclosed that Bankman-Fried's disheveled appearance was a deliberate public relations strategy.
He believed that his unkempt hair added value, even suggesting that his early career bonuses as a trader were influenced by his unique hairstyle. He sought to cultivate an image as an eccentric crypto pioneer.
Wellā¦ The exchange was just as unkept as Sam's hair. All of this mess eventually resulted in FTX's collapse in November 2022, following the leak of a balance sheet that exposed Alameda's unusually close financial ties to FTX, triggering panic among investors and customers.
Bankman-Fried could potentially face a 110-year prison sentence if convicted and given the maximum punishment.
TL;DR:Ā Caroline Ellison emotionally detailed the final days of the cryptocurrency empire she helped build, revealing a financial web of deceit. She spared some never-heard-before details, such as a sheet called "Things Sam is freaking out about," that she worked on, by continuously observing his situation.
SELECTED MEME OF THE DAY
