The latest insider exposure of FTX executives: SBF "maliciously" published the private diary of his ex-girlfriend, and once planned to buy an island for "refuge"

By Nancy, PANews

Recently, SBF leaked to the media the private documents of former Alameda Research CEO Caroline Ellison as a witness. The U.S. prosecutor believes that this is SBF deliberately discrediting the witness’s credibility and trying to shift responsibility. At the same time, court documents are constantly revealing more truths about FTX’s collapse, including FTX’s plan to buy Nauru as a “doomsday refuge”, executives using power for profit, spending huge sums of money to buy real estate and other misuse of funds, and SBF also intends to list FTX.

The New York federal court has previously charged SBF with eight criminal charges, and once these charges are confirmed, SBF will face a maximum of 115 years in prison. However, SBF refused to plead guilty and was granted bail for 10 months. The first trial will start on October 2, which also means that it has won more time and opportunities to obtain a defense.

Alameda ex-CEO diary is “published”, SBF is accused of **** trying to transfer criminal responsibility

In December last year, Caroline Ellison pleaded guilty to the criminal charges brought by the U.S. prosecutor and the fraud charges brought by the U.S. CFTC, including deliberately misleading the lender about the amount of Alameda’s loan, obtaining the loan service provided by FTX.com that does not require collateral, has no negative balance and does not require a margin call, and SBF agrees to falsify financial statements.

Caroline Ellison is a dangerous “tainted witness” for SBF. In order to avoid additional charges, Caroline Ellison is fully cooperating with the US prosecutors, including providing multiple electronic devices. Right now, the U.S. prosecutors have not handed over the evidence collected from Caroline Ellison. As the approval date approaches, SBF has also proposed to the U.S. judge that this will affect its pre-trial defense preparations.

The Google documents disclosed by the New York Times recently revealed the ambivalence between Caroline Ellison and SBF, a former comrade-in-arms and lover, and her role in Alameda. Caroline Ellison wrote in the document that she was very unhappy with her job and believed that she was not suitable to manage Alameda and was not good at making decisive decisions. Especially the on-off couple relationship with SBF made her work complicated, and said, “When he is around, there is an instinct of shrinking, and he becomes quieter and more obedient to others.” After breaking up with SBF, Caroline Ellison also said that she no longer has enthusiasm for Alameda, and is even more disgusted by SBF’s celebrity aura, and deliberately severed contact with SBF in order to “regain rights”.

In May 2022, the collapse of the encryption market led to a wave of bankruptcy in the market. For this reason, SBF and others used billions of FTX FTX customer funds to fill the loopholes in the Alameda account. And SBF also intends to close Alameda and has invested more than $400 million in another trading firm Modulo Capital, which makes Caroline Ellison feel excluded. And the collapse of SBF’s business empire makes Caroline Ellison feel “it’s great to end it all”.

The report also pointed out that Caroline Ellison’s salary is far less generous than other executives of FTX and Alameda, but whether she knows this is unknown. The exchange’s founders and other key employees received $3.2 billion in payments and loans, according to court documents. Among them, Ellison received $6 million in salary, while FTX engineering director Nishad Singh received $587 million, another co-founder Gary Wang received $246 million, and SBF received $2.2 billion.

Regarding this document being released to the public at this time, US prosecutors believe that SBF selectively released some documents in an attempt to discredit witnesses, portray Caroline Ellison as a “abandoned lover who committed the so-called FTX crime alone”, and promote his defense through the media, outside the limits of the court and the rules of evidence. “While the government wants overwhelming evidence that the defense’s lies are false, it would be biased and inappropriate for the defendants to defame Caroline Ellison’s credibility before trial, especially since the defense has not substantiated material admissible at trial, let alone provided to the government.” Prosecutors asked the judge to issue an order limiting “extrajudicial statements by parties and witnesses that could interfere with a fair trial by an impartial jury.”

At present, SBF lawyers have not yet responded to this. Prior to this, SBF had blamed Alameda for the collapse of FTX, saying that it did not really participate in Alameda’s daily operations. However, according to previous Bloomberg reports, Gary Wang is a more dangerous witness than Caroline Ellison. According to the CFTC’s allegations, Gary Wang helped create the underlying code that enabled Alameda to “maintain an unlimited line of credit” on FTX, and Wang also helped create other avenues that gave Alameda an unfair advantage when transacting on the platform, including faster execution times. Gary Wang has also pleaded guilty and is cooperating with the prosecutor’s investigation.

There was a plan to buy a sovereign state to build a “shelter”, and several executives embezzled hundreds of millions of dollars

The latest court documents also show that Caroline Ellison revealed that FTX had a cash deficit of more than $10 billion about 8 months before its collapse, and she also admitted in the document that She and FTX executives had privately estimated in August last year that FTX owed customers more than $8 billion in fiat currency and was “unable to repay”.

And SBF squandered these funds. For example, PANews previously reported that in addition to related investments in the encryption field, FTX’s investment list of up to US$5.2 billion also made many unorthodox investments in the months before the collapse, involving agriculture, drones and other fields.

Recently, according to a report shared by FTX debtors, SBF also spent more than $243 million to acquire real estate in the Bahamas, including multi-million dollar properties for employees, friends and family, such as the 11,500-square-foot penthouse in the Albany resort community, the “Albany Beehive” unit property that cost more than $18 million, and the “Old Fort A Lot” that cost more than $16 million.

Not only that, FTX Trading Ltd also sued SBF and other former executives not long ago, including Caroline Ellison, former FTX technical director Zixiao “Gary” Wang, and former FTX engineering director Nishad Singh, seeking to recover more than $1 billion they allegedly misappropriated before FTX went bankrupt. shares.

The latest report from Bloomberg even revealed the frenzied profligacy of FTX and Alameda. Court documents show that amid allegations that FTX used blended funds for political and “charitable” donations, a memo exchanged between SBF’s brother Gabriel Bankman-Fried and an FTX Foundation official described a plan to buy the sovereign state of Nauru as part of a plan to build a “bunker/sanctuary” that would ensure the survival of most effective altruists should 50% to 99.99% of the global population die. At the same time, they are also developing “reasonable regulations on the genetic enhancement of human beings and building a laboratory there”. The memo also noted that “there may be other things that are also useful to a sovereign nation”.

At the same time, the document also pointed out that it also pointed out that the inner circle of SBF abused power for profit. For example, Nishad Singh, the former engineering director of FTX, received a free transfer of FTX common stock worth approximately US$477 million; SBF also granted itself more than US$6 million in equity in February 2020 without paying any return. Caroline Ellison also allegedly acquired 2.75 million valuable FTX call options between December 2020 and March 2021 without offering anything in return. Caroline Ellison, after estimating that the FTX funding gap reached tens of billions of dollars, still chose to give herself a bonus of 22.5 million U.S. dollars around March 2022, of which 10 million U.S. dollars went into her personal bank account and invested in an AI company in her own name, and the rest was deposited into her FTX account. Not only that, Caroline Ellison also embezzled funds to distribute millions of dollars for herself during 2021 and 2022, and obtained 2.75 million valuable FTX call options between December 2020 and March 2021.

It is worth mentioning that the above-mentioned court documents also revealed that SBF has also expressed its ambition to list FTX on several occasions, and said that he is taking measures. Court documents say that in April 2021, SBF entered into a false “payment agency agreement” that erroneously advanced the date by two years. The agreement was for an external auditor who was supposed to prepare a financial statement for the company while FTX was considering an IPO.