Secret audio, a star witness, and ‘Thai prostitutes’ complicate Sam Bankman-Fried’s defense

Fallen crypto mogul Sam Bankman-Fried is currently on trial for seven counts of fraud and conspiracy. The evidence presented by the prosecution thus far has been damning, with several witnesses testifying to Bankman-Fried’s involvement in a yearslong conspiracy to steal from customers and defraud investors. One of the key witnesses for the prosecution is Caroline Ellison, the former CEO of Bankman-Fried’s crypto trading house, Alameda Research, and his ex-girlfriend. Ellison provided crucial testimony, including financial documents that she prepared, indicating the dishonest practices employed by Bankman-Fried and the cover-up of Alameda’s financial struggles. She also confirmed the testimony of another executive, Gary Wang, who revealed that Alameda had a secret line of credit using FTX customer funds without their knowledge or permission. Ellison described Bankman-Fried’s unkempt appearance as a calculated PR move to portray himself as an eccentric entrepreneur. She consistently referred to Bankman-Fried as the driving force behind Alameda and FTX’s decisions. However, it is important to note that Ellison has already pleaded guilty and cooperated with prosecutors to secure a lighter sentence for herself. The defense has yet to cross-examine Ellison’s testimony, but they did question her for six hours on Thursday, prompting objections from the prosecution. Another witness, former software developer Christian Drappi, revealed a recorded meeting led by Ellison, in which she implicitly acknowledged Bankman-Fried’s involvement in the decision to use customer funds to repay loans. This recording strengthens the prosecution’s case by providing a prior consistent statement from a witness. Ellison also testified about Bankman-Fried possibly ordering a large sum of money to be wired to Chinese crypto wallets as a bribe to unfreeze Alameda’s trading accounts in China. She mentioned a failed scheme involving the use of accounts belonging to “Thai prostitutes” to drain Alameda’s China accounts. The defense will have to decide whether Bankman-Fried will testify in his own defense, which could potentially change the dynamics of the trial. Prosecutors had initially expected to finish presenting their case on October 25th, but they may finish earlier if they determine that they have presented enough evidence of the fraud.