Former Alameda Research CEO Testifies on Sam Bankman-Fried’s Alleged Attempt to Secure Funding from Saudi Crown Prince
As the criminal trial of Sam Bankman-Fried (SBF) entered its sixth day, startling revelations emerged as former Alameda Research CEO Caroline Ellison testified about attempts to secure equity for FTX, the crypto exchange that faced bankruptcy in November.
Ellison claimed in court that Bankman-Fried explored the possibility of raising funds for FTX through an investment from Saudi Crown Prince Mohammed bin Salman, commonly known as MBS. Testifying on October 11, Ellison disclosed that discussions about hedging Alameda investments in 2022 included considering MBS as a potential investor in FTX before its collapse.
The revelation of the potential investment from MBS was found in one of Ellison’s online journals titled “Things Sam is Freaking Out About.” Prosecutors had previously mentioned in August that they could present this note during the trial. Ellison’s testimony outlined the list, which included “raising funds from MBS” and strategizing to turn regulators against the crypto exchange Binance.
MBS, holding a net worth in the billions, serves as both the crown prince and prime minister of Saudi Arabia. Despite his significant investments in blockchain gaming through the nation’s sovereign wealth fund, he has faced controversy, including allegations of involvement in the 2018 assassination of Washington Post journalist Jamal Khashoggi at the Saudi consulate in Istanbul.
A report from April indicated that Bankman-Fried had a meeting with MBS in Saudi Arabia approximately two weeks before FTX filed for bankruptcy. While SBF aimed to raise $1 billion for FTX, Saudi investors were reportedly willing to contribute around $250 million—the same amount requested for bail after Bankman-Fried’s arrest in the United States.
Ellison’s testimony is expected to continue through October 12, where SBF’s legal team will cross-examine her. As of the current publication, Ellison has admitted to fraud during her tenure as head of Alameda, primarily placing blame for the misuse of customer funds on Bankman-Fried. She alleged that he directed her to provide misleading financial information to Genesis lenders.
Prosecutors anticipate concluding their case on October 26 or October 27, following which Bankman-Fried’s defense will begin calling witnesses. SBF has pleaded not guilty to seven criminal counts related to fraud at FTX, with an additional five charges to be addressed in a March 2024 trial. The trial continues to unravel the intricate details surrounding the alleged financial irregularities at FTX.