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Caroline Ellison: SBF Tried to Raise Capital from Saudi Crown Prince

Former Alameda Research CEO, Caroline Ellison, testified for the second time Wednesday, stating that Sam Bankman-Fried planned to raise capital from Mohammed bin Salman.

Caroline Ellison testified Alameda Research's turmoil led to TX collapse.
Credit: Michael M Santiago/Getty Images

NEW YORK, NY – In her second day of testimony at the Sam Bankman-Fried trial on October 11, Caroline Ellison shed more light on the events leading up to the anticipated FTX debacle in November 2022. As the trial unfolds, Ellison's revelations provide a gripping insight into the financial challenges and desperate measures taken by Alameda Research in the months preceding the market upheaval.


Lenders Demand Repayment Amidst Market Downturn


During her testimony, Ellison disclosed that lenders had demanded repayment of millions in loans from Alameda Research in mid-June 2022, a move triggered by the market downturn in May. "I was very stressed out," Ellison admitted, reflecting the intense pressure that mounted during this period.


Genesis Capital, one of Alameda's prominent lenders, recalled a staggering $500 million in loans, as evidenced by screenshots taken from conversations between Ellison, Bankman-Fried, and Genesis employees via Telegram. At the time of the loan recalls, Alameda Research was grappling with a colossal debt load. Their credit line with FTX exceeded $13 billion, while open-term loans amounted to over $1.3 billion, according to Ellison's testimony.


Caroline Ellison Instructed to Falsify Financial Documents


Ellison also revealed that Sam Bankman-Fried had instructed her to devise "alternative ways" to present Alameda's financial information to lenders, with particular emphasis on Genesis. According to Ellison, the disclosure of Alameda's true financial status to Genesis could potentially lead to the recall of all loans and damage the company's reputation. "I didn't want Genesis to know that," she remarked in reference to Alameda's substantial liability towards FTX.


Elaborate Deception: Alternative Spreadsheets


In a startling revelation, prosecutors presented evidence that Ellison had worked on at least seven alternative spreadsheets intended for Genesis. One such spreadsheet sent in June listed Alameda's total liabilities at $10.3 billion, significantly understating the actual amount, which was approximately $15 billion at the time.


SBF Devises Survival Plans


During her testimony, Ellison unveiled some of Bankman-Fried's ambitious plans to weather the storm. One of these strategies involved raising capital from Mohammed bin Salman, the crown prince of Saudi Arabia. According to court evidence, Ellison had compiled a list of "things Sam is freaking out about" months before the exchange's collapse.


The list included raising capital from "the MBS," securing additional capital from BlockFi, which had already extended Alameda Research over $660 million in loans, and an intriguing initiative to "get regulators to crack down on Binance." The latter strategy aimed to expand FTX's market share, as recounted by Ellison.


An Unmentioned Allegation: FTX's $150 Million Bribe


During her testimony, Ellison also made reference to a $150 million bribe that FTX allegedly paid to a Chinese official in 2021 to release funds frozen as part of a money laundering investigation. It's important to note that this alleged bribe is not part of the United States trial.

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