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Sam Bankman-Fried used political donations for influence: SBF trial live updates

source-logo  blockworks.co 11 October 2023 14:15, UTC

FTX co-founder Sam Bankman-Fried faces seven federal charges in a criminal trial taking place in Manhattan. The former crypto exchange exec is accused of misappropriating billions of dollars of customer funds for real estate, donations, political contributions and investments.

The current state of play: Caroline Ellison continues her testimony, after an opening day from the prosecution’s star witness. While there were a few revelations from Ellison — including a look into SBF’s presidential dreams — her testimony from the first day was mostly focused on spreadsheets.

10:10 am ET: Caroline Ellison returns to the stand

Former Alameda co-CEO Caroline Ellison is back on the stand to continue testimony Wednesday morning.

It wouldn’t necessarily be a surprise if Ellison took up the majority of the day. The defense and the prosecution both have multiple lines of questioning to pursue with the former executive and former SBF love interest.

Aside from Ellison, Judge Lewis Kaplan is expected to rule on two motions — Alameda’s use of lawyers in its auto-deletion policies.

The second concerns one of SBF’s investments into Anthropic AI — a company that later ended up getting a multi-billion investment promise from Amazon.

The prosecution has already argued that a line of questioning related to the investment isn’t relevant to the case, because alleged investments — even successful ones — made with customer money (and without the customers knowing, mind you) are still…bad. The decision now rests with Kaplan and his gavel.

The defense, however, believes that the growth of the investment gives the jury some insight into SBF’s investing strategy, with a potential focus on how the investment could return money to customers. Bankman-Fried’s more successful ventures have not really been mentioned throughout the testimonies in the trial so far.

Before we dive into a fresh day of the trial, let’s go over some of the highlights from Tuesday.

Ellison said she didn’t really feel qualified to be Alameda’s co-CEO, but no biggie because she still reported to SBF.

She made a $200,000 salary — though with a sweet $20 million bonus in 2021.

SBF pushed Ellison and Alameda to “borrow as much money as we could,” which led to roughly $10 billion in outstanding third-party loans by mid-2022.

Bankman-Fried also believed that political donations were a good use of [mostly customer] money, and said that “relatively small amounts of money” could be used for influence. An example used at the trial was the cool $10 million donated to now-President Joe Biden.

Oh, and we learned that SBF believed he had a 5% chance of becoming president.