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Court Reveals Bankman-Fried's Attempts to Salvage FTX and Alameda

Court Reveals Bankman-Fried's Attempts to Salvage FTX and Alameda

Alameda Research CEO spills secrets of FTX's troubled final days.

Former CEO of FTX, Sam Bankman-Fried, had a range of concerns leading up to the implosion of his crypto exchange, according to new testimony. Among them were maneuvers against rival Binance, investments in Snapchat, and seeking financial backing from Saudi royalty.

New information came to light during the second day of the ongoing trial in New York, where Caroline Ellison, the former CEO of Alameda Research, presented her personal notes and testimonies related to FTX and Alameda.

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Ellison revealed that a crash in the Terra ecosystem in May 2022 had rattled Bankman-Fried. The man was so concerned that he contemplated folding Alameda and looked to raise $1 billion from a Saudi recognized for his blockchain gaming investments. 

Ellison also discussed Bankman-Fried's competitive strategies. According to her, one of his key objectives last year was to get regulatory authorities to "crack down" on its competitor crypto exchange Binance to bolster FTX's market share. Ellison, however, did not elaborate on how he intended to accomplish this.

Financial concerns were not limited to Saudi royalty and market share battles. Bankman-Fried was reportedly in talks for additional loans from crypto lender BlockFi, which had already extended over $660 million to Alameda.

His diversified financial interests also included trading Japanese government bonds and acquiring stocks of Snap Inc. Ellison mentioned another mysterious concern labeled as "Willie being happy," speculated to refer to Bankman-Fried's mentor, William MacAskill.

During the trial, Ellison confessed that while poor hedging strategies were problematic for Alameda, the company also grappled with extensive open-term loans and massive expenditures from its line of credit with FTX.

She revealed that as of September 2022, Alameda's outstanding liabilities with FTX stood at a staggering $13.7 billion, while its open-term loans were at $1.3 billion. As Ellison put it:

Every day, I was worrying about the possibility of <loans> being called at the same time.

On top of that, Ellison added that she even created "alternative" spreadsheets at Bankman-Fried's request to misrepresent Alameda's financial standing to its lenders.

As the trial progresses, it becomes clear that a handful of concerns plagued Bankman-Fried, leading to the downfall of FTX. These revelations provide a new layer of context to one of the most shocking collapses in the crypto industry.

Aaron S., Editor-In-Chief
Having completed a Master’s degree on Economics, Politics & Culture for the East Asia region, Aaron has written scientific papers with a comparative analysis of the differences between US’ Western and Japan’s Collective forms of capitalism, 1945-2020.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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