{"id":7298,"date":"2023-10-30T22:30:40","date_gmt":"2023-10-30T22:30:40","guid":{"rendered":"https:\/\/infundpros.com\/markets\/crypto\/sbf-admits-alameda-had-special-privileges-on-ftx-closes-out-second-day-of-testimony\/"},"modified":"2023-10-30T22:30:42","modified_gmt":"2023-10-30T22:30:42","slug":"sbf-admits-alameda-had-special-privileges-on-ftx-closes-out-second-day-of-testimony","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=7298","title":{"rendered":"SBF Admits Alameda had \u201cSpecial Privileges\u201d on FTX, Closes out Second Day of Testimony"},"content":{"rendered":"<div>\n<p><noscript><\/noscript><\/p>\n<p>FTX founder Sam Bankman-Fried finished out his second day of testimony in his landmark fraud case this afternoon in Manhattan federal court.<\/p>\n<p>With U.S. Assistant Attorney Danielle Sassoon leading the cross-examination,Bankman-Fried gave mostly curt answers while often denying recalling specific prior pieces of evidence and testimony.<\/p>\n<p>Bankman-Fried appeared anxious on the witness stand, occasionally rocking back and forth in his chair. His voice seemed softer than usual, occasionally stammering over his words.<\/p>\n<p>In one instance, Bankman-Fried claimed he could not recall receiving an eight-tab spreadsheet with doctored finances from Alameda Research CEO, Caroline Ellison, to present to investors. However, the prosecution pointed out they have metadata from his Google account proving he did, in fact, open the spreadsheet.<\/p>\n<p>At one point, Bankman-Fried stated he didn\u2019t recall so many times on the witness stand he eventually quipped, \u201cI could take a wild guess if you want me to.\u201d\n<\/p>\n<h2>SBF\u2019s distinct understanding of margin trading<\/h2>\n<p>\nThe prosecution revisited mid-June 2022, wherein Bankman-Fried allegedly gave Ellison the go-ahead to repay the trading firm\u2019s third-party loans despite needing to borrow more money from FTX to do so.<\/p>\n<p>When Bankman-Fried attempted to answer the question by bringing up margin trading, Judge Kaplan demanded that he answer the question directly. When Sassoon asked Bankman-Fried to clarify that taking money from FTX to repay lenders did not constitute as margin trading, Bankman-Fried claimed it \u201cvery well could be a margin trade.\u201d<\/p>\n<p>However, he quickly called his response \u201cspeculative\u201d before stating he could \u201cexplain if you want.\u201d Sassoon did not ask him to.\n<\/p>\n<h2>Alameda Research\u2019s \u201cspecial privileges\u201d<\/h2>\n<p>\nBy September 2022, Bankman-Friend sent out a memorandum with reasons as to why Alameda Research should shut down and be replaced in the market with Modulo Capital, a then-rival trading firm in which Bankman-Fried had \u201csignificant\u201d investments that were undisclosed to the public.<\/p>\n<p>Bankman-Fried argued that Modulo Capital had a \u201cmuch lower PR cost\u201d compared to Alameda Research, which he described as \u201creally large.\u201d Bankman-Fried admitted he spent billions on PR for his crypto empire and, ultimately, could not shutter his trading due to the debt it owed back to FTX.<\/p>\n<p>Moreover, the disgraced FTX founder refused to admit he believed that repaying Alameda Research\u2019s loans by borrowing money from FTX would put the exchange at significant risk. Sassoon went on to show that Bankman-Fried had direct knowledge of Alameda Research\u2019s marked $65 billion line of credit in FTX\u2019s database. However, Bankman-Fried distanced himself from being intimately involved, claiming he gave chief technical officer, Gary Wang, and head of engineering, Nishad Singh, \u201csuggestions\u201d that they \u201cinterpreted.\u201d\n<\/p>\n<h2>What to expect this week<\/h2>\n<p>\nBankman-Fried will most likely finish his time on the witness stand tomorrow. The prosecution will offer two witnesses, an FBI agent and an Apollo Crypto employee, during their rebuttal. If convicted, Bankman-Fried faces what may be the rest of his life in prison.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<div class=\"newsletter home-newsletter single\">\n<div class=\"left-side\">\n<p>\n        <em><br \/>\n            Enter your email for our Free Daily Newsletter        <\/em>\n    <\/p>\n<p> A quick 3min read about today&#8217;s crypto news!<\/p>\n<p>    <span class=\"response-msg\" id=\"newsletter-response\"><\/span>\n<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>Read the full article <a href=\"https:\/\/cryptonews.com\/news\/sbf-admits-alameda-had-special-privileges-on-ftx-closes-out-second-day-of-testimony.htm\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>FTX founder Sam Bankman-Fried finished out his second day of testimony in his landmark fraud case this afternoon in Manhattan federal court&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":7299,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[],"class_list":{"0":"post-7298","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-crypto"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SBF Admits Alameda had \u201cSpecial Privileges\u201d on FTX, Closes out Second Day of Testimony | inFundPros<\/title>\n<meta name=\"description\" content=\"FTX founder Sam Bankman-Fried finished out his second day of testimony in his landmark fraud case this afternoon in Manhattan federal court. 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