‘That seems pretty bad’: Bankman-Fried jury hears tape from Alameda’s final days

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Alameda chief executive Caroline Ellison told her staff that Sam Bankman-Fried authorised a raid on FTX customer money to repay the trading firm’s loans, according to recordings of an employee meeting from the company’s final days played in court on Thursday. 

“I’m sure this wasn’t just a Yolo thing,” Alameda software developer Christian Drappi said to Ellison, using the acronym for “you only live once”, as he pressed her for details of who had prior knowledge of the scheme to secretly pay Alameda’s debts with FTX customer money. 

The grainy audio files were among the most keenly anticipated evidence in Bankman-Fried’s federal criminal trial. Prosecutors hope the tape will show the jury that Ellison told the same story about the alleged fraud even before she pleaded guilty and began co-operating with the government against her former boss and on-again, off-again boyfriend. 

Bankman-Fried, who faces decades in prison if convicted, maintains his innocence. 

Asked who had approved the use of FTX clients’ money to pay off Alameda’s loan, Ellison said in the meeting: “Um . . . Sam, I guess” and then broke into a nervous giggle. FTX was “basically always allowed Alameda to, like, borrow user funds”, she later said. 

“The words ‘I guess’ were a vocal tick,” she explained during testimony to the court earlier in the day. She said she had not started the meeting intending to “cast blame on anyone”.

The clips from the recording come from a covert tape of an all-hands meeting of Alameda’s staff on November 9 2022. Staff at Bankman-Fried’s trading firm had seen that his FTX exchange was unable to meet customer demands to withdraw money, and that he was ready to sell the company to arch-rival Binance. They demanded answers from their boss.  

Drappi told the court in testimony on Thursday that 15 staff sat in a circle around Ellison, who was “slouching” on a beanbag in Alameda’s Hong Kong office, while others joined on video. One employee, who had started at the company just three days earlier, recorded the tense, deadpan conversation among the frightened group of employees. 

On the tape, Drappi asked Ellison if Alameda had borrowed from FTX through the normal “spot margin book”, a programme that let customers lend their deposit to other customers for their trading. Ellison said that the loans to Alameda had been made through a special back channel. 

“That seems pretty bad,” replied Drappi, who, like many staff quit immediately afterwards.

Earlier on Thursday, Ellison told the jury that by early November, with FTX facing collapse, she felt she could finally tell the truth to her staff, after misleading them about Alameda’s finances for months. 

“I’m sure this is not that fun for you, but I certainly appreciate how open you’ve been,” one employee said as the meeting drew towards a close. 

“Thanks. I mean, it was kind of fun. I don’t know,” Ellison said.

Drappi took the stand for about an hour after Ellison’s testimony concluded on Thursday afternoon. The court will hear next from Zac Prince, chief executive of crypto lender BlockFi.