Sam Bankman-Fried’s Transactions with FTX and Alameda Research: The True Story of Spent Money with Timingly Traveling Millionaires

According to Yedidia, he witnessed a meeting between Sam Bankman-Fried and several other people. Singh told Yedidia that the meeting was about full accounting of Alameda Research and FTX. Everyone in that meeting except Bankman-Fried later pleaded guilty to criminal charges and is cooperating against Bankman-Fried in this case.

Among the first witnesses called on to testify was a commodities trader from London, Marc-Antoine Juilliard. He said that when the exchange began to fall apart, he was unable to withdraw all his bitcoin, worth a total of $100,000.

In an attempt to preempt that argument, Rehn urged jurors to “scrutinize their testimony carefully.” But, he told them, they will offer first-hand insights into the multibillion-dollar fraud the government alleges Bankman-Fried perpetrated with their help.

Cohen encouraged jurors to be skeptical of the testimony they hear, since it is believed that they will receive a lighter sentence as a result of their cooperation.

After Bankman-Fried was arrested, prosecutors filed charges against four members of his inner circle, including the CEO of Alameda Research, who was his girlfriend at the time.

Cohen criticized the government for displaying a photograph to the jury of Bankman-Fried in what was his trademark look before he was sent to jail in August: shorts and a t-shirt, with unkempt hair.

The prosecution alleges that Bankman-Fried’s company was a giant money-maker. At any time, Bankman-Fried could — and did — use money from FTX customers.

Bankman-Fried appeared to pay attention while in jail for more than a month. He is allowed to take notes on his laptop during the trial.

Rehn detailed how Bankman-Fried took money from FTX customers “to make himself even richer.” He made speculative investments when he purchased property for friends and family.

Bankman- Fried traveled all over the world with private planes, he lived in a $30 million apartment in The Bahamas. Rehn noted Bankman-Fried hung out with actors, athletes, and politicians.

Rehn charted the rise and equally dramatic fall of Bankman-Fried’s crypto empire, which include the cryptocurrency exchange FTX and a crypto-focused hedge fund, called Alameda Research.

He had a lot of money. He had power. He had influence,” said Thane Rehn, an assistant U.S. attorney for the Southern District of New York. All of that was built on lies.

Sam Bankman-Fried’s Bean Bag Chair a lie too? (Tembedded) Customer Marc-Antoine Julliard Testifies That FTX is Fine, Its Assets Are Fine

The trial of disgraced crypto mogul Sam Bankman-Fried kicked off in earnest Wednesday with lawyers from both sides delivering their opening statements.

The government made a strong case for one count in the indictment and is close to presenting another one as two of Bankman- Fried’s college roommates testify against him. Bankman- Fried had a love life and a bean bag chair.

The first witness of the prosecution is a customer, named Marc-Antoine Julliard. It’s not relevant whether he was smart to invest in cryptocurrencies. The important part of his testimony? As a result of Bankman-Fried posting, FTX is fine. Assets are fine.” The exchange went belly-up, he did not withdraw his money from it.

Adam Yedidia testified that Bankman-Fried knew as early as June or July of 2012 that the enterprise was in trouble. They had the conversation on a padel tennis court in their luxury Bahamas complex, the Albany.

Yedidia was testifying with immunity because he was afraid that he might have inadvertently written code that contributed to a crime. He looked like an elf with a suit and glasses and was a speaker who took a beat after questions to think before bobbing his head close to the microphone to answer.

Yedidia worked for Bankman-Fried twice: first as a trader at Alameda Research for two months in 2017 before returning to a PhD program, then from 2021 onward for FTX as a software developer, where he  lived — along with Bankman-Fried — in the Orchid, a $35 million penthouse apartment in the Albany. The jury was shown photographs of a gorgeous balcony and cream and gray interior of the apartment.

The groupchat where Bankman-Fried said he was assuming that the aggregate rent would be zero dollars was posted on the Signal website.

Source: Was Sam Bankman-Fried’s bean bag chair a lie too?

Why he quit FTX when Alameda Research Done It Right? A Cross-examination of a Dev with a Bug That Made His Liabilities Explode

Yedidia testified that he quit FTX after getting a phone call telling him that Alameda had used FTX customer funds to repay its loans. The FTX went bankrupt just before he resigned.

We lied to the public about giving special privileges to Alameda Research on FTX, which allowed it to withdraw unlimited amounts of funds.

Around July 2021, Yedidia worked on a process to automate customer deposits and withdrawals. He introduced a bug that made the liability of Alameda look larger than it was. The bug was first discovered in December of 2021 and overstated the claims by $500 million. Yedidia fixed it in June 2022; by then, it was exaggerating Alameda’s liabilities by $8 billion.

Yedidia asked if things were okay, and Bankman-Fried replied, “We’re not bulletproof anymore.” He said Bankman-Fried looked worried while he said it, but he trusted Sam. Besides, he was just a dev — his job was to make sure the code ran well. There were other people who could handle the money.

At one point, prosecutor Danielle Sasson asked if Bankman-Fried really slept in a bean bag chair. In the Philippines and Hong Kong, it would happen a lot, but it wasn’t as frequently in the Bahamas, Yedidia said.

The cross-examination was rough going for the jury, the observers, and the judge, who reprimanded defense counsel Christian Everdell for repeating the same questions the government had just asked. Yedidia doesn’t deal with Customer money, interact with investors, or have much contact with FTX’s finances, according to Everdell during his cross-examination. He tried to get Yedidia to say Bankman-Fried didn’t use much money on himself, and to suggest that Yedidia’s immunity agreement may have compromised his testimony.

FTX was attractive as an investment because it was growing really fast, Huang said. In a Powerpoint presentation shown by FTX, there was a slide that said FTX was a “custodian.” Huang explained that meant FTX took customer deposits and held them, then processed withdrawals. He said that if he’d known FTX was using customer deposits for its own purposes, he most likely wouldn’t have invested. In crypto, he explained, there was a general expectation that customer deposits weren’t spent.

In an email to Bankman-Fried, Huang noted some concerns Paradigm had. Specifically, the firm was concerned about governance, and the relationship between FTX and Alameda. If Alameda had special access to FTX, customers would want to trade elsewhere if they found out, Huang said. Following that email, Huang says he was told that there was no preferential treatment for Alameda.

The company made about $80 million in profit in the second quarter of its current fiscal year, as shown in the balance sheet sent to us by Bankman- Fried. It was shown in the balance sheet that FTX had a set of trading expenses of nearly $60 million in the last quarter. He testified that if all of the expenses were recorded, the profits would look very high, and that he expected the numbers being presented to him to be accurate.

Huang knew there was no board of directors for FTX before he invested, he testified, but that he’d pressed Bankman-Fried to create one. He told us that he was going to create a board, but he wasn’t sure if investors were up to the task.

Wang hasn’t finished his direct testimony and hasn’t sat for cross-examination yet. He could undermine his own credibility, though the prosecution seems to have prepared for that possibility. When Wang testified that Alameda Research had been so named because it obscured that the firm dealt with crypto, making it easier to get a bank account, that testimony was followed by video of Bankman-Fried saying substantially the same thing on a Blockworks podcast. We were able to see the documents that Bankman-Fried signed that supported Wang’s testimony.