- SBF tried using Thai prostitute identities to access the funds.
- Caroline disclosed some intricate details about SBF unfreezing Chinese Funds.
- Caroline and SBF presented fabricated balance sheets to cover the missing funds.
In the developing FTX case, Sam Bankman Fried’s (SBF) ex-girlfriend, Caroline Ellison, the sole witness, unraveled some intriguing information at a hearing in the courtroom. On her second day of testimony, she explicitly explained the extraordinary measures that FTX under Bankman-Fried’s leadership, took to unfreeze billions of dollars worth of funds seized on exchanges, by Chinese officials in that country in early 2021.
Ellison stated that she and SBF tried to trade funds off frozen accounts using Thai prostitutes’ identities, which were provided by a top executive. However, as this approach did not work SBF decided to bribe the Chinese government with $150 Million, in November 2021, after which, it unfroze the funds.
Interestingly, in a document presented to the courtroom, Ellission had recorded the transaction of the $150 Million in a significant way.
In the document titled “Notable/idiosyncratic PnL stuff,” she categorized the bribe as “-150 m [dollars] from the thing?”
However, in contradiction to what is to be intuitively accepted, Judge Lewis A. Kaplan made clear to the jury that bribery is not among the crimes that Bankman-Fried has been charged with. Instead, SBF is facing both criminal and civil charges as he stole billions of dollars from customers and investors by allowing Alameda to access FTX customers’ money.
When suspicious rose as large as life in several of Alameda’s largest crypto lenders, they requested for balance sheet. Ellison confessed that she and SBF created seven versions of falsified balance sheets to hide the black hole in funds.
Eventually, the publication of one of the doctored balance sheets on November 2 led to public speculation that FTX was insolvent. As an involuntary reaction to this, many were withdrawing their funds. Ellison stated that $100 million was withdrawn every hour, which eventually led to the exposure of an $8 Billion hole created by Alameda’s use of FTX customer funds.
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