He was over his head or his empire was built on lies

Witnesses to Bankman-Fried’s Contribution to Alameda Research, FTX, and Other Reports to the London Stock Exchange

During that time, Yedidia said he witnessed a meeting between Sam Bankman-Fried, Caroline Ellison, Gary Wang, and Nishad Singh. Singh later told Yedidia that the meeting had been to do a 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.

One of the first witnesses called on to testify was a commodities trader from London. He said that when the exchange went down, he couldn’t withdraw all of hisbitcoin, worth $100,000.

Rehn urged the 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 urged jurors to be skeptical of the testimony, as they were likely to receive a lighter sentence as a result of their cooperation.

The Long Journey of Bankman-Fried: From Coins to Cryptos: A Tale of Two Sexes and One Kind of a Censor

We got some other details on Bankman-Fried’s personal life “Sometime in early 2019, the defendant told me that he and Caroline [Ellison] had had sex and asked if it was a good idea for them to date,” Yedidia said. He told Bankman-Fried it was not a good idea. At the time, she was just a trader at Alameda Research and Bankman-Fried’s subordinate. She became the co-CEO later.

Bankman-Fried’s trademark look was displayed to the jury in a photograph, even though he was sentenced to jail in August.

His lead attorney, Mark Cohen, pushed back on that narrative which suggested that Bankman-Fried is a villain. He said FTX in its infancy was growing at an unimaginable pace, “like building a plane as you’re flying it.”

Bankman-Fried, who has been jailed for more than a month, appeared to pay close attention. He took notes on a laptop he is permitted to use during the trial.

Bankman-Fried made himself even richer by taking money from FTX customers. He made speculative investments after buying property for family, friends and himself.

Bankman- Fried lived in a $30 million apartment in The Bahamas and traveled all over the world on private planes. Bankman-Fried was with athletes, politicians and actors.

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 wealth. He had power. He had power, said an attorney for the New York district. “But all of that — all of that — was built on lies.”

Sam Bankman-Fried’s bean bag chair a lie too? Theoretical aspects of his love life and trade-offs

Attorneys from both sides delivered their opening statements on Wednesday during the trial of disgraced tech mogul Sam Bankman-Fried.

Today the government has made a brisk case for one count in the indictment and is close to making a case for a second one, as two of Bankman-Fried’s college roommates testified against him. We heard that Bankman- Fried had a love life and bean bag chair.

Yesterday, the prosecution called a commodities trader as its first witness, Marc-Antoine Julliard. Whether it was smart of him to invest in crypto is sort of irrelevant. The important part of his testimony? As a result of Bankman-Fried, people know that FTX is fine. Assets are fine.” — he did not withdraw his money from the exchange as it went belly-up.

Adam Yedidia, Bankman- Fried’s former college roommate, gave testimony that Bankman- Fried knew as early as June or July of 2022, that the enterprise was in trouble. They had a discussion on the tennis court at the Albany.

Yedidia was testifying with immunity, because he was worried that as a developer, he might have unwittingly written code that contributed to a crime. He gave the impression of an extraordinarily serious elf, in a suit and glasses, and was a deliberate speaker, taking 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 saw photographs of the luxury apartment, which had a cream and gray interior and a gorgeous balcony with a pool.

We saw a comment from Bankman-Fried in a groupchat that said he had assumed that the rent would be zero dollars.

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

When FTX Shutted, Customers Were Not So Frustrated. Sam Bankman-Fried and the Padel Tennis Court

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

In the process of fixing the code, Yedidia discovered that after the bug was caught and the erroneous $8 billion was removed, Alameda was still $8 billion in the hole. That concerned him because “it seemed like a lot of money for Alameda to be owing FTX.” So he asked Bankman-Fried about the money on the padel tennis court.

Yedidia worked on a process to automate the processing of customer deposits and withdrawals. In writing the code, he introduced a bug that made Alameda’s liabilities look larger than they were. The bug was discovered in December and had over-exaggerated the liabilities. Yedidia fixed it in June 2022; by then, it was exaggerating Alameda’s liabilities by $8 billion.

Yedidia said he asked if things were okay, and Bankman-Fried replied, “We were bulletproof last year, but we’re not bulletproof anymore.” He said Bankman-Fried looked worried while he said it, but he trusted Sam. The job of a developer was to make sure the code ran well. People could take care of the money.

At one point, Danielle Sasson inquired if Bankman-Fried had slept in a bean bag chair. Yedidia said that in the Bahamas, that didn’t happen as often as it had in Hong Kong: “I think he would take occasional naps, but not with much frequency.”

The main thing Everdell accomplished was teeing Sasson up for an absolutely deadly re-cross. Yedidia explained that he understood that Bankman-Fried was not sure about Alameda’s ability to repay its customers. He also noted that Bankman-Fried had a second apartment in the Albany, which he did not share with roommates. He did not say if it had a bean bag chair. When Yedidia said that FTX deceived all its customers, he was stricken from the record, but the jury still heard it.

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

A Communication with a Customer Investment in a High-Yielding Technology Company: FTX, Pardigm, Bankman-Fried

FTX was an attractive investment because it was growing fast. FTX was described as a “custodian” in a slide shown in a presentation. FTX took 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. He said that the customer deposits were expected to be 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. Customers would want to trade elsewhere if they discovered that Alameda had special access to FTX. Following that email, Huang says he was told that there was no preferential treatment for Alameda.

We were shown a balance sheet from Bankman-Fried that showed an Annualized net profit of $322 million for the year 2021, which Huang claimed to mean the company made about 80 million in profit that quarter. The balance sheet showed an annual set of trading expenses of more than $60 million, which means FTX had trading expenses of at least 15 million in that quarter. He testified that the profits would look artificially high if not all of the expenses were recorded, and that he expected the numbers being shown to him to be generally 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 didn’t think investors had that much to add, but he did represent that he would be creating a board at some point,” Huang said.

Huang’s testimony was immediately followed by Bankman-Fried’s alleged co-conspirator (and other former roommate) Gary Wang, who walked stiffly into the courtroom and appeared frankly miserable. Wang worked at FTX as the chief technology officer and also as a co-owner. Within moments of sitting down, he admitted he’d committed financial crimes and listed the people he’d committed them with: Bankman-Fried, Caroline Ellison, and Nishad Singh.