Latest update — Former FTX CEO Sam Bankman-Fried trial [Day 12]

Cointelegraph reporters are on the ground in New York for the trial of former FTX CEO Sam “SBF” Bankman-Fried. As the saga unfolds, check below for the latest updates.

Oct. 19: Former FTX legal counsel presents spreadsheet used to track $2.1 billion in loans to SBF, other execs

FTX’s former general counsel Can Sun was unaware of the exchange’s commingling of funds with Alameda Research, he told jurors on Oct. 19 as part of his testimony in Sam Bankman-Fried’s criminal trial.

Sun said he learned about Alameda’s exemption from the liquidation engine system from other employees in August 2022. Normally, the system would liquidate loss-making trades, but Alameda reportedly bypassed the mechanism due to its exception.

Upon learning about the problem, Sun allegedly worked on a plan to fix the issue. The plan would include a delay-liquidation mechanism to replace the non-exemption on Alameda’s account. According to the plan, the delayed mechanism would later be applied to other market makers on FTX, which also sought to notify customers and regulators about the issue. According to San, the plan was stalled by other FTX departments and was never implemented.

Furthermore, Sun acknowledged that he relied on Bankman-Fried’s statements about segregating customer funds to develop the company’s terms of service and answer regulators’ inquiries. FTX’s terms of services said that “none of the Digital Assets in your account are the property of, or shall or may be loaned to, FTX Trading” — in opposition to what was apparently happening between the sister companies. The same terms would apply to fiat assets, Sun noted in his testimony.

Additionally, the former FTX attorney disclosed a spreadsheet he used to trace loans made by Alameda to Bankman-Fried, Gary Wang, Ryan Salame and Nishad Singh. According to the spreadsheet, Alameda loaned them $2.1 billion across 35 loans.

These loans were used to fund other venture investments by FTX. While this process wasn’t the most transparent way of carrying out investments, it was a legal option at the time, Sun said.

According to prosecutors, the spreads

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Author: Ana Paula Pereira

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