While testifying in front of jurors on Friday, Sam Bankman-Fried said that he was worried about Alameda Research, which awaited a giant turmoil in the crypto market.
Sam said that “Alameda might be roughly insolvent” if Bitcoin fell another 50%. He wrote a memo suggesting shutting down Alameda Research two months before its collapse.
While recalling his concerns over Alameda’s then-CEO Caroline Ellison, SBF’s ex-girlfriend, Sam told the court that “I was worried Alameda might go bankrupt” as she had not hedged against a potential market crash despite his many suggestions.
The defense attorney Mark Cohen confirmed SBF telling Ellison to hedge by presenting a document titled “Things Sam is freaking out about,” which was written by Ellison. The first entry on the list was “Hedging.”
Another memo written by SBF reads that “current Alameda leadership is good, but not good enough to be able to trust with such a big operation.”
Sam said Ellison told him In June 2022, Alameda may have gone bankrupt, but it was just an accounting error that overstated Alameda’s liabilities with $8 billion. Alameda had a net asset value of $8 billion to $10 billion at that time, he said.
Talking about Caroline Ellison, SBF said that she was a competent manager and trader who could handle developers but was not good at risk management and hedging. According to SBF, Caroline Ellison wanted more from their relationship than what he was willing to give.
Also read: SBF Believes He Did Not Defraud Anyone, It Was “Mistakes”
