SBF Trial, Day 7: In SBF Trial, Did the Defense Lose Its Opportunity With the Star Witness?
Oct 13, 2023
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Caroline Ellison, star witness in SBF Trial, remains unshaken by defense's attempts to discredit her. Ellison reveals SBF's plans to buy Telegram and emphasizes his control over Alameda. Former employee Christian Drappi corroborates Ellison's account. Zach Prince, founder of BlockFi, briefly testifies. Tense cross-examination, doubts raised about Ellison's leadership, and further analysis of trial clips.
Caroline Ellison revealed that Sam Bankman-Fried had plans to buy Telegram, showing his interest in major investments outside of Alameda.
Former Alameda employee Christian Drappi confirmed that Sam Bankman-Fried was the ultimate decision-maker at Alameda and had direct communication with the trading firm, undermining the defense's attempt to question Ellison's leadership.
Deep dives
Cross-examination of Caroline Ellison
During the cross-examination of Caroline Ellison, the defense team failed to make any new points and often asked repetitive questions. Shocking new facts were revealed, such as Sam Bingman-Fried expressing interest in making a big investment in Telegram. Ellison admitted that Bingman-Fried was not involved in day-to-day decisions and that she considered resigning from Alameda at various points. The defense tried to raise questions about Ellison's leadership and her culpability in securities fraud, but their arguments were undermined by her responses.
Testimony of Christian Drapey
Former Alameda software developer Christian Drapey testified that while Sam Bingman-Fried was not the CEO of Alameda, he still had direct communication with the trading firm and was involved in major trades. Drapey described the all-hands meeting where Caroline Ellison led and answered questions. Audio clips from the meeting revealed concerns about the financial stability of Alameda and discussions about FTX customer deposits. Drapey's testimony supported Ellison's claim that Bingman-Fried was the ultimate decision maker at Alameda.
Zach Prince's Testimony
During his brief testimony, Zach Prince highlighted the contrast between BlockFi's lending program, which made it clear that customer deposits would be lent out to generate revenue, and the situation at FTX. Prince also mentioned that BlockFi lent hundreds of millions of dollars to Alameda research, which later went bankrupt. His testimony further demonstrated the questionable practices surrounding the handling of customer deposits.
Day seven of Sam Bankman-Fried’s criminal trial saw the defense team unable to discredit Caroline Ellison, despite multiple attempts. The defense's questions often seemed aimless, failing to draw any substantial conclusions. Ellison remained steadfast, revealing that SBF had plans to buy Telegram around the time Alameda "borrowed" $14 billion of FTX customer money.
Defense attorney Mark Cohen tried to portray Ellison as the one in charge of Alameda, but she clarified that SBF was the ultimate decision-maker. Ellison also disclosed that she had considered resigning from Alameda but was persuaded by SBF to stay, emphasizing his control over the firm.
The day continued with testimony from Christian Drappi, a former Alameda employee, who corroborated Ellison's account. Zac Prince, founder of the bankrupt crypto lending firm BlockFi, briefly took the stand, setting the stage for his testimony to continue the next day.