An internal document was revealed in court that showed Sam Bankman-Fried believed Binance to have leaked Alameda’s balance sheet to the media in 2022.
Evidence presented in court as a part of the ongoing criminal trial against Sam “SBF” Bankman-Fried, former CEO of FTX exchange, revealed that SBF believed Binance to have leaked an Alameda balance sheet to the media in 2022.
On Oct. 11 Caroline Ellison, the former CEO of Alameda Research, said that SBF created a memo that dates back to Nov. 6, 2022, and outlined possible investors and other parties to reach out for a bailout.
According to the document, Bankman-Fried wrote that Binance had been “engaging in a PR campaign against us.”
It continued to say that Binance, “leaked a balance sheet; blogged about it; fed it to Coindesk; then announced very publicly that they were selling $500m of FTT in response to it while telling customers to be wary of FTX.”
On Nov. 2, 2022, CoinDesk released a report based on claims that it saw a balance sheet from Alameda and that it was possibly not in good standing. This was a key event in the lead-up to the run on the exchange and ultimately its bankruptcy.
SBF also noted that FTX was capitalized but not entirely liquid, which Ellison clarified by saying out of the $12 billion client assets said to be held by the exchange only $4 billion were available to process their withdrawals.
Related: Caroline Ellison testimony: SBF bribed Chinese officials for $150M to unfreeze funds
The document revealed Justin Sun, the founder of the TRON network and Huobi advisor, as a potential investor though it reads “turns out he’s close to CZ.”
Reports from inside the courtroom from the Inner City Press on X (formerly Twitter) have Ellison saying she was “stressed” when CZ tweeted about liquidating his share of FTX Token (FTT).
Ellison: The tweet characterizes the delay as being about anti-spam and nodes. But we just didn't have the money.
— Inner City Press (@innercitypress) October 11, 2023
AUSA: Are these the tweets of CZ of Binance?
Ellison: Yes. He tweeted, "we have decided to liquidate any FTT on our books." I was stressed out.
This is currently the second week of the criminal trial of the former FTX CEO. Bankman-Fried faces seven charges of conspiracy and fraud tied to the collapse of FTX, to which he has pleaded not guilty.
A second trial is scheduled for sometime in March 2024 during which SBF will face another six charges related to including bank fraud and foreign bribery conspiracy charges.
Ellison has been a key witness in the trial thus far and is scheduled for cross-examination by the defense’s attorneys on Oct. 12.
Cointelegraph reporters are on the ground in New York covering the trial. As the saga unfolds, check here for the latest updates.
Magazine: SBF trial underway, Mashinsky trial set, Binance’s market share shrinks: Hodler’s Digest, Oct. 1–7
