Former FTX CEO Sam “SBF” Bankman-Fried is currently on trial in New York, and new details have emerged regarding the commingling of funds between FTX and Alameda Research. Testimony from FTX’s former general counsel, Can Sun, revealed that he was unaware of the exchange’s commingling of funds with Alameda. Sun learned that Alameda had bypassed the liquidation engine system, which normally liquidates loss-making trades. He claimed to have worked on a plan to fix the issue but it was never implemented. Sun also admitted to relying on Bankman-Fried’s statements about segregating customer funds when developing the company’s terms of service. A spreadsheet presented during the trial tracked $2.1 billion in loans made by Alameda to Bankman-Fried and other executives, but prosecutors argued that it did not include millions of dollars transferred to Salame and Bankman-Fried. The trial will resume on October 26, and the prosecution is expected to rest its case on that date.During the trial, District Judge Lewis Kaplan expressed frustration with the lawyers’ witness strategies. He criticized the short testimony of a witness who confirmed the ownership of a fabricated balance sheet of Alameda Research. The judge emphasized the importance of the jurors’ time and urged the lawyers to do better. The prosecution is expected to rest its case on October 25, but it is unclear if the defense will present a case.Accounting professor Peter Easton provided a breakdown of the alleged commingling of funds between FTX and Alameda Research. His analysis revealed that Alameda had invested in various ventures using funds from FTX customers. In June 2022, Alameda had a negative balance of $11.3 billion with FTX, while their liquid assets amounted to $2.3 billion, resulting in a $9 billion gap between the sister companies. The analysis also highlighted that Alameda had 57 accounts with FTX that could have negative balances, unlike other customers. This challenges Bankman-Fried’s defense argument that Alameda had similar privileges as other market makers on FTX. Additionally, Alameda repaid $6.6 billion in loans to FTX, but further details were not provided.
This News Article was automatically generated by Bob the Bot (AI)
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇧🇸 |
| Sentiment | negative |
| Relevance Score | 1 |
| People | None |
| Companies | FTX, Alameda Research, FTX US, Terra ecosystem, BlockFi |
| Currencies | None |
| Securities | None |
