14 Oct, 2023

Inside the SBF Trial – What Happened Until Now? 

Suchet Dhindsa Salvesen
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Suchet Salvesen
Suchet Dhindsa Salvesen Suchet Salvesen Expert Author
Suchet is a Norwegian economist, entrepreneur, and investor, serving as the CFO and COO of Brainfund. With over a decade of experience in global expansion, venture capital, and emerging technologies, he earned his MBA from the NMBU School of Business & Economics. He held dual bachelor's degrees from the University of South-Eastern Norway. His career...
Shawn Munir
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Shawn Munir
Shawn Munir Shawn Munir Expert Author
Shawn Munir is the CEO of Coinweb.com and spearheads all the collaborative partnerships for the platform. He bought his first Bitcoin in 2017 and never looked back. He is also an investor in 200+ Web3 startups and is considered an expert in the field. Before building Coinweb with his co-founders, he co-founded Presail, a management...
SBF Trial


  • Government prosecutors completed their direct examination of former Alameda Research CEO Caroline Ellison in the fraud trial of Sam Bankman-Fried.
  • The trial showcased an interesting view of FTX’s and Alameda’s prior work, revealing many problems and funny situations.

The Corruption of Caroline Ellison

In the ongoing fraud trial of Sam Bankman-Fried, government prosecutors wrapped up their questioning of Caroline Ellison, former CEO of Alameda Research, on Wednesday. 

Through her detailed testimony, Ellison portrayed Bankman-Fried as the central figure in his organization, suggesting he wielded significant power and influence over his team.

Caroline Ellison exiting the courtroom
The Corruption of Caroline Ellison | Source: Yahoo Finance

During her tenure as the CEO of Alameda Research, Ellison consistently sought Bankman-Fried’s approval before making major decisions. 

Whether repaying billions in loans from third-party lenders, addressing employees, tweeting, or sharing Alameda’s financial records with investors, she always consulted with him. 

Ellison even sought his opinion on which version of seven different drafts of financial statements to present to investors.

Now, Bankman-Fried can only observe as Ellison, once his close associate and former girlfriend, stands as a witness against him, accusing him of seven counts of fraud. 

After admitting her seven charges last December, Ellison cooperates with the authorities. In exchange for her testimony, she hopes for a reduced sentence.

Throughout the questioning, the prosecutors aimed to drive home two significant points: Ellison’s Alameda often drew funds from FTX customers, done either with Bankman-Fried’s tacit consent or direct instruction.

A key example highlighted was Alameda’s use of customer funds from its FTX credit line to settle its debts in May 2022.

Prosecutors also discovered that Caroline Ellison’s to-do list included “getting regulators to crack down on Binance” and that the two conspired to keep Bitcoin under $20k by selling customer BTC.

Alameda Didn’t Care About Cybersecurity At All

According to recent allegations by former employee Aditya Baradwaj, the trading firm lost $200 million due to prevalent vulnerabilities in the crypto world.

SBF and Caroline Ellison before the trial
Alameda Didn’t Care About Cybersecurity At All | Source: Yahoo Finance

In one significant mishap, Alameda lost $40 million by venturing into yield farming on a dubious blockchain.

The platform’s creator apparently held the company’s assets captive, leading to prolonged negotiations. The outcome of these discussions remains uncertain.

Yield farming, a method to gain rewards by committing tokens to a blockchain financial app, has its risks. 

Malicious entities can trap considerable capital and prevent withdrawals, causing significant losses.

Another lapse in security resulted in the leak of private keys, causing a loss of over $50 million in diverse tokens. The leak was suspected to be the work of a former employee.

The most massive setback was a $100 million loss when an Alameda representative was deceived by a counterfeit phishing link advertised on Google Ads.

However, Baradwaj emphasized that these mishaps were merely the tip of the iceberg regarding Alameda’s security deficiencies.

What more details do you think we’ll find out by the end of this trial?