Second week of SBF trial: full of condemning evidence This is the testimony of the former billionaire

The second week of Sam Bankman-Fried's criminal trial saw key testimony and heated courtroom drama.

The prosecution fought back and provided witnesses who were members of the Financial Times SBF's inner circle, including former Alameda Research CEO Caroline Ellison and former Financial News chief technology officer Gary Wang.

Wang concluded his testimony earlier this week, revealing an important memo issued by the SBF ahead of the FTX's downfall. Meanwhile, Ellison's testimony continued for days, including disclosures that were both dry and dramatic for the court.

Ellison's revelations

BlockFi CEO Prince Zach appeared in court on Oct. 13, ending a tumultuous week.

Ellison came under the spotlight at the start of the week, with the court finding that Ellison had a complicated personal and professional relationship with SBF. The crux of her testimony was her claim that SBF personally directed her to participate in the criminal activity that occurred at Alameda Research, namely the misuse of billions of dollars worth of client funds.

Ellison's narrative became the center of the week as she opened up about her rollercoaster relationship with SBF. Digging into the final days of FTX, she called it the "darkest period" of her life, admitting that she and SBF illegally injected billions of dollars into Alameda Research from FTX's client accounts.

Ellison revealed some intimate aspects of her relationship with SBF, a confession that was both blunt and revealing. Although she was emotional at admission, she remained firm during cross-examination.

Ellison vividly portrays the rise and eventual decline of SBF, highlighting his dedication to public image. Ellison detailed SBF's character, saying that despite his appearance of being disheveled, he was deeply aware of his public reputation. She describes him as an adventurer, especially if the potential rewards are huge.

Meanwhile, the SBF's defense sought to challenge Ellison's claims in extensive cross-examination. However, the lawyers were unable to conclude disclosures that could seriously damage her credibility or account.

The domino effect

The week ended with Prince testifying and sharing details of BlockFi's close relationship with Alameda and FTX before they went bankrupt.

Prince told the jury that when FTX went bankrupt, BlockFi had about $650 million in outstanding loans in Alameda, and another $350 million was held in various cryptocurrencies on the FTX exchange.

Prince said BlockFi's business decisions were based on Alameda's balance sheet, which appeared strong at the time. However, prosecutors allege that Alameda and FTX have been falsifying the documents to deceive investors and cover up huge holes in their balance sheets.

Prince claimed not to know and no indication that the documents shown to BlockFi were false balance sheets, but admitted he knew the documents were unaudited.

However, Mark Cohen, the attorney who led SBF's defense, tried to shift the blame onto BlockFi, saying that a lack of comprehensive due diligence, especially the decision to trust unaudited financial records, was the main reason for BlockFis' collapse.

What's next?

The court is awaiting testimony from two key figures related to FTX — Nishad Singh (who previously served as director of engineering) and Ramnik Arora (another important figure in the corporate hierarchy).

The prosecution team has set 26 October as a preliminary deadline to conclude their arguments and adjourn the trial. After that, the defence team will begin rebuttals, present rebuttals, challenge the prosecution's claims and call witnesses.

These unfolding testimonies are expected to clarify the complex relationships of financial transactions and the complex personal dynamics involved.

Source: Golden Finance