CoinDesk Podcast Network SBF TRIAL PODCAST 10/10: Caroline Ellison Testimony Day 1
Oct 10, 2023
Caroline Ellison, likely to testify about the $8 billion deficit in Alameda's balance sheet, is taking the stand this afternoon. They discuss how SBF knew about the deficit but publicly denied any liquidity or accounting issues in FTX. Updates on the trial of Sam Bankman-Freeze, including testimony from FTX co-founder Gary Wang, expectations for Caroline Ellison's testimony, and potential witnesses Zack Prince and Elon DeKal.
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Hidden $8B Alameda Shortfall
- Gary Wang revealed FTX's insurance fund and customer balances were effectively fabricated and disconnected from actual assets.
- An Alameda sub-account showed about a minus $8 billion balance while public claims said FTX was fully liquid and funded.
Insurance Fund Was Nonsensical Math
- Wang described the insurance fund math as arbitrary and unrelated to real reserves or liabilities.
- Prosecutors used this to show internal metrics did not reflect solvency or customer protection.
Public Denials Amid Run On Withdrawals
- Wang testified that FTX publicly asserted it was fully liquid even as withdrawals couldn't be honored.
- He tied those public denials to internal knowledge of insufficient assets for customer withdrawals.