Former close friend to testify against SBF, list of other witnesses revealed.

Former friend to testify against SBF, other witnesses named.

Author: Helene Braun, Elizabeth Napolitano, Coindesk

Translation: Wang Eryu, LianGuaiNews

• FTX founder SBF is on trial this week, with the collapsed cryptocurrency exchange accused of stealing billions of dollars.
• Key witnesses include former colleagues and friends, especially Caroline Ellison and Gary Wang, who have close ties to FTX and Alameda Research. SBF’s former partner Ellison had a deep understanding of FTX’s internal operations and has admitted to engaging in misleading behavior.
• Witnesses Nishad Singh and Wang held important positions at FTX and Alameda and have pleaded guilty to related charges.

The collapse of global cryptocurrency exchange FTX has been nearly a year, and its founder and former CEO, Sam Bankman-Fried, has been disgraced. This week, he will try to convince a jury of his peers to regain his freedom. But first, we will hear testimony from some of his close friends.

During the six-week trial, prosecutors will delve into various testimonies, internal documents, emails, and a mountain of evidence to reveal the trail of the alleged theft of billions of dollars of customer funds by this cryptocurrency exchange. The most notable evidence may come from the prosecutor’s witnesses: SBF’s former friends and allies.

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Several former colleagues and friends of SBF have reached plea agreements with the US Department of Justice and will testify against the former cryptocurrency tycoon, including his former lover Caroline Ellison and childhood friend Gary Wang, both of whom were deeply involved in the day-to-day operations of FTX and its quantitative trading fund Alameda Research. Two other individuals whose names have not been publicly disclosed may also testify after receiving immunity, indicating that they may also be connected to the exchange. The US Department of Justice also announced last weekend that prosecutors plan to subpoena former FTX customers and investors from around the world as witnesses during the trial.

Witnesses

Caroline Ellison: Former CEO of Alameda, pleaded guilty

Caroline Ellison is one of the most anticipated witnesses and is expected to testify against SBF. Court documents show that as the former head of Alameda Research, a cryptocurrency hedge fund associated with FTX, she will disclose the relationship between the two companies and the amount of FTT held by FTX. Additionally, due to her previous romantic relationship with the founder of FTX, she may also bring some salacious gossip. She is said to be one of the few insiders who truly understand the internal situation of FTX.

Both of Ellison’s parents are economists at MIT, and she met SBF at their previous employer, the Wall Street-focused trading firm Jane Street. The two reunited in October 2021, and SBF convinced her to join his cryptocurrency company at a cafe in the Bay Area.

In December 2022, shortly after the collapse of FTX, during a plea hearing, Ellison admitted to intentionally misleading lenders and obtaining “unrestricted credit lines without collateral” through FTX for her then-hedge fund Alameda Research, even though the company did not need the money at the time.

Ellison admits to fraud charges and has signed a plea agreement, with no tax-related criminal behavior. Her understanding of the alleged sharing of customer funds by FTX and Alameda may become a key point in the trial.

Given her previous romantic relationship with the former crypto tycoon, she is also considered the person who knows SBF best on a personal level. According to her diary, the relationship ended in February 2022, and SBF leaked the diary to The New York Times in August. (Related reading: Latest insider exposure of FTX executives: SBF “maliciously” disclosed ex-girlfriend’s private diary, once planned to buy an island for “refuge”)

In her diary, she mainly wrote about her feelings towards SBF and how the on-and-off relationship affected her work at Alameda Research. She wrote, “I feel too close to [him], it’s painful.”

Although she did not mention any living conditions in her diary, it is understood that Ellison and other FTX employees lived together with SBF in a top-floor apartment worth $40 million in Albany, Bahamas.

This makes Ellison one of the few insiders who seem to be closely associated with SBF both professionally and emotionally, giving her a unique perspective to discuss the former FTX founder’s ethical behavior as a businessman, as well as his personal characteristics.

Nishad Singh: FTX Engineering Director, has pleaded guilty

Nishad Singh is another early employee of Alameda Research. At that time, the headquarters of this trading company was in an apartment in Berkeley, California, with only four other employees. Singh had a close relationship with SBF during high school. He served as the engineering director of Alameda and, like Ellison, lived with SBF in a luxury top-floor apartment in the Bahamas with ten other people. After working at Alameda for a year and a half, he became the engineering director of the newly established FTX derivatives exchange, where his responsibilities were minimal.

It is reported that Singh is one of the three people who control the FTX matching engine key. The FTX matching engine is the system that facilitates the exchange in processing buy and sell orders, and the key holders can freely transfer funds. He is also aware of FTX lending customer funds to Alameda. Like Ellison, he pleaded guilty to six criminal charges, including fraud and conspiracy, in February of this year.

Gary Wang: Co-founder of Alameda Research and FTX, has pleaded guilty

Gary Wang is the co-founder of Alameda Research and FTX, and also SBF’s right-hand man. Gary Wang served as the chief technology officer of both companies and was referred to as a key participant in FTX.

Wang also has a personal understanding of SBF. They were math camp partners in high school and roommates at the Massachusetts Institute of Technology. He was also one of the ten roommates in the Nassau top-floor apartment where SBF lived. The Commodity and Futures Trading Commission (CFTC) stated that Wang “allowed Alameda to maintain virtually unlimited credit limits at FTX.”

In December 2022, Wang and Ellison pleaded guilty to the allegations related to the collapse of FTX.

Andria van der Merwe: Financial Market Regulatory Investigator

Andria van der Merwe’s resume on the consulting firm ComLianGuaiss Lexecon website shows that she is an economist specializing in complex financial market regulatory investigations. As an expert in financial regulation and market risk, she is expected to provide insights into how SBF and its core circle are suspected of conspiring to violate federal securities and commodities laws. She may also testify about the impact of the FTX collapse on the broader financial market.

Peter Easton: Professor at Notre Dame University

Prosecutors stated that Professor Peter Easton from Notre Dame University will outline the financial condition of Alameda Research and FTX, including the balance sheet issues of Alameda that triggered the collapse of SBF’s multi-billion dollar crypto empire. His testimony will discuss the holding of client funds and whether the actual bank account balances match the internal ledger balances of FTX.

Defense Witnesses

Thomas Bishop: Corporate Consultant specializing in forensic investigations and accounting issues

Tom Bishop is a corporate consultant specializing in forensic investigations and accounting issues. Court documents do not disclose much information about his planned testimony, only revealing that he may discuss the “calculation of financial numbers and indicators” of FTX and Alameda based on “publicly available documents and records, including but not limited to Alameda’s balance sheet”. Defense lawyers stated that if necessary, they intend to subpoena Bishop to refute possible testimony from the Department of Justice.

Brian Kim: Data Analysis and Forensics Expert

Data analysis and forensics expert Brian Kim may discuss internal communications among SBF, FTX, and its sister companies’ employees. If subpoenaed, he may testify about the “content, metadata, and file paths” related to Slack data and Google documents, which allegedly can prove that SBF instructed employees to destroy evidence of alleged fraud. Court documents show that this data includes “fields listing authors, custodians(s), and viewer(s) of [documents and messages], as well as dates of content creation, modification, viewing, saving, and/or deletion”. Like Bishop, if called to testify, Kim’s focus is also on refuting the testimony from the Department of Justice.

Joseph Pimbley: Financial Risk Management Expert

Financial advisor Joseph Pimbley is an expert in financial risk management. Court documents show that he may tell the jury during his testimony that “FTX’s software infrastructure… lacks robust reporting mechanisms and also lacks testing and quality assurance of data integrity and code,” which external users like SBF cannot see or easily discover. Defense lawyers stated their intention to subpoena him to refute the testimony of Wang and Singh.

Andrew Di Wu: Professor of Finance and Technology at the University of Michigan

Andrew Di Wu, a professor of finance and technology at the University of Michigan, may provide an overview to the jury of how cryptocurrency exchanges and the underlying blockchain technology operate. Court documents show that he may also explain to the court in his testimony the “unique complexities of operating centralized cryptocurrency exchanges, particularly those involving cross-border operations… and the challenges of handling transactions involving multiple fiat currencies and cryptocurrencies.” The defense states that Di Wu may appear in court to respond to testimony provided by an FBI agent for the prosecution.

Undetermined Witnesses

As of September 29th, some key executives and other individuals closely related to SBF have not been publicly listed as potential witnesses, including several key figures from FTX.

Sam Trabucco: Former Co-CEO of Alameda Research

Prior to Caroline Ellison taking over as the sole CEO of Alameda Research, Sam Trabucco served as Co-CEO alongside her before resigning in August 2022, just one year into his tenure. In 2021, he posted on X stating that he drove Alameda’s expansion beyond its initial business of being a market maker for low-volume cryptocurrencies and into higher-risk trading, leading the company to achieve “huge” profits. Trabucco was not listed as one of the executives aware of FTX transferring client funds to Alameda in a Wall Street Journal article last year.

Dan Friedberg: Former Chief Compliance Officer of FTX

Daniel Friedberg served as the Chief Compliance Officer of FTX from March 2020 to November 2022. He had previous involvement with an online poker website that was involved in a scandal, where an estimated $20 million was misappropriated. According to reports, he told an ally to blame an undisclosed advisor of the company for the responsibility. He led the cryptocurrency practice at Fenwick & West LLP before joining FTX as a partner.

It was reported that he provided details about FTX to federal prosecutors in November of last year. Reuters reported that although his name was not confirmed, he is “expected to be subpoenaed as a government witness” in the SBF trial. His lawyer did not respond to requests for comment.

Ryan Salame: Co-CEO of FTX Digital Markets, Pleaded Guilty

Ryan Salame is the Co-CEO of FTX Digital Markets, a subsidiary of FTX based in the Bahamas. After reaching a plea agreement this fall, he became the fourth executive within SBF’s inner circle to plead guilty to federal charges.

Campaign finance records show that Salame, at the direction of SBF, provided millions of dollars in illegal campaign donations to dozens of U.S. congress members. However, while Salame helped his former boss gain influence on Capitol Hill, he claims to have had no knowledge of the severity of FTX’s financial troubles or the crimes the executives were accused of. Related reading: (Another Former FTX Executive Pleads Guilty, Secretly Funding Republican Elections with SBF, Highest Assets Possibly Forfeited: $1.5 Billion)

It was reported that Salame has submitted documents related to the collapse of FTX to federal prosecutors, but according to The New York Times, he will not testify in court. A previous court filing stated that he would invoke his Fifth Amendment right against self-incrimination if subpoenaed to testify.

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