Caroline Ellison disclosed that Sam Bankman-fried pursued an investment from Saudi Crown Prince and Prime Minister Mohammed bin Salman and talked to her about wishing to buy Snapchat.
On Wednesday, Caroline continued testifying against her ex-boyfriend Sam Bankman-Fried, revealing further what he was up to while crypto companies under his management were forging literal crimes with no way out.
She accused SBF of completely ignoring the team’s recommendations to protect Alameda’s investments while the market was going downward, while he later blamed Caroline for not hedging Alameda’s positions.
FTX had nearly $1-2 billion in funds while all this facade was disclosed publicly in November 2022, she said. However, SBF told team members to publish false and misleading data so that it may stop FUD and customers keep their funds from the exchange.
According to a spreadsheet presented by prosecutors, Alameda had a total borrowing of nearly $10 billion in June 2022, which amounted to 77% of total FTX customer deposits.
At the time, Genesis – a now-bankrupt crypto lender that was a major lender of Alameda Research – asked Caroline to provide Alameda’s financial reports. While the reports were too risky to disclose to the lender, SBF and Caroline made fallacious changes to the balance sheet to make it look better.
They were both still concerned that it would scare Genesis even after making harsh changes to the balance sheet, so Caroline created seven different alternative sheets to send to the lender. “I didn’t want to be dishonest but was afraid to share the truth,” she said in the testimony.
While Alameda Research got into trouble after a huge dump in the crypto market in June 2022, several lenders asked to pay back their loans.
According to messages shown by prosecutors, Genesis asked Alameda to pay back $500 million in two separate clips of $250 million. Another crypto lender, Celsius also asked to return its loan at the same time.
Caroline said that it was the time when SBF was considering investment from the Saudi Crown Prince in exchange for FTX equity, which he was going to pay to Alameda lenders, including Celsius and Genesis.