Original court transcript from XInner City Press, compiled by Odaily jk.
On Thursday, October 12, local time in the United States, the case between FTX Exchange and SBF has reached its seventh day in court. The trial, expected to last six weeks, saw its second star witness, SBF ex-girlfriend Caroline Ellison, give evidence on her final day today. Todays testimony is relatively scattered compared to yesterday, because it is the turn of the defense lawyer to question; however, there are still quite a few interesting records revealed, and the two sides are still tit for tat.
Odaily adds the following summary:
Sam Bankman-Fried (SBF), the former actual controller of FTX exchange, is involved in a major legal dispute. In a recent court session, a series of witnesses,Includes FTX co-founder and CTO Gary Wang and former Alameda Research executive Caroline Ellison, provided testimony about the inner workings of FTX and Alameda Research. They uncovered possible illegal activity and misconduct, including allegations that FTX client funds were misappropriated at the direction of SBF and Alameda submitted false financial statements. SBF may have used its position at the two companies to engage in opaque and irregular financial transactions involving billions of dollars, according to testimony.
Gary Wang and Caroline Ellison detailed a complex series of transactions and decision-making processes in which FTX customer funds were allegedly improperly used to pay Alameda’s debts and expenses. Additionally, they point to SBFs personal relationships with other executives and employees, including its relationship with Ellison, as potentially playing a role in those decisions.During the trial on the sixth day, star witness Caroline Ellison detailed how SBF operated FTX in several aspects including Alameda’s misappropriation of FTX customer funds, Alameda’s false financial statements, CZ’s Twitter response, etc. illegal. As the trial progresses to the seventh day, she will testify for the second day and face questioning from the defense lawyer (SBFs lawyer).
(Note: In the trial transcript, defendants are represented by Sam Bankman-Fried and SBF’s Cohen is represented by SBF’s defense attorney Mark Cohen.)
SBFs Cohen: What are the security measures at Alameda?
Ellison: Protecting our API keys.
Cohen: Was Alameda ever hacked?
Cohen: Have you ever done accounting?
Ellison: I did.
Cohen: Did you work with Voyager and Genesis?
Ellison: Yes, there are others.
SBFs Cohen: Is Alameda a hedge fund?
Ellison: I call it a trading firm.
Cohen: Do you think this structure is appropriate, with a third-party lender?
Ellison: It has advantages compared to being a hedge fund and having investors.
SBFs Cohen: What is the semester system?
Ellison: Twice-a-year bonus.
Cohen：You got $20 million in 2021?
Cohen: $2 million in 2022?
Ellison: I think $3 million in the first half of 2022.
SBFs Cohen: Were you ever romantically involved with Mr. Bankman-Fried?
Cohen: On a high level, you guys started living together?
AUSA Sassoon: He was just repeating the direct inquiry.
Judge Kaplan: Keep asking about other things.
SBFs Cohen: Did you have any communication issues after your breakup?
Ellison：I avoided meeting him alone. But we still use Signal communication.
Cohen: Didnt you talk outside of work?
Ellison: We lived in the same apartment, so we did talk.
SBFs Cohen: How many FBI agents came to your parents home?
Ellison: Four to five.
Cohen: Who else was in the house?
Ellison: My boyfriend was there, and my mom’s cleaner came once a week.
Cohen: They had a search warrant and they seized three computers?
Ellison: My mothers one.
SBFs Cohen: Did they confiscate the computer that belonged to your boyfriend?
Judge: I allow it.
Cohen：Does your boyfriend work at Alameda too?
Cohen: Did you retain legal counsel and meet with prosecutors to obtain a cooperation agreement?
SBFs Cohen: You pleaded guilty on December 19th?
Ellison: I don’t remember the exact date, but it was mid-December.
SBFs Cohen: Did you express your concerns to anyone else besides Sam?
Ellison: And Gary and Nishad.
Cohen：Have you considered quitting your job?
Ellison：Yes, but I didnt (raise).
Caroline Ellison informs Alameda staff meeting
SBFs Cohen: Lets talk about the plenary. Where were you?
Ellison: Hong Kong.
Cohen: Are you trying to get employees to stay?
Ellison: No, Im trying to help them pursue their best interests.
Cohen：What did Sam say?
Ellison：He might start a new company.
SBFs Cohen: What happened after the meeting?
Ellison: Can you be more specific?
Cohen: Theres a lot going on. Did you tell employees about the illegal conduct?
AUSA Sassoon: Have you ever been asked who was involved in illegal behavior?
Ellison: Yes. I said it was Sam, Gary, Nishad and I - and the decision to repay the loan with client funds was Sams.
AUSA Sassoon: Did you request or authorize the $65 billion credit line to Alameda?
AUSA: In your opinion, did FTX collapse because of a tweet from CZ?
Ellison: Thats definitely a factor.The main reason is that Alameda borrowed $10 million from FTX and was unable to repay it.
SBFs attorney: She went beyond the scope of representation.
AUSA: Ms. Ellison says she always listens to Sam. Here, Mr. Bankman-Fried knew she was going to have this meeting. He didn’t try to remove her as CEO — instead, he provided input. So she is his agent.
The trial in the SBF case will continue and Odaily will continue to follow the reports for you.