Disgraced former FTX CEO Sam Bankman-Fried believed that rival digital currency exchange Binance leaked an FTX balance sheet to the media to hurt its rival, according to documents presented in court during Bankman-Fried’s trial.
Caroline Ellison, the former head of FTX sister company Alameda Research, said Bankman-Fried created a memo back on November 6, 2022, about contacting possible investors and others that may want to help bail out the troubled exchange.
LISBON, PORTUGAL – NOVEMBER 01: Changpeng Zhao, commonly known as “CZ”, founder and CEO of Binance, the world’s largest cryptocurrency exchange by trading volume as of July 2022. (Photo by Horacio Villalobos#Corbis/Getty Images)
Sam Bankman-Fried leaves the courthouse (Michael M. Santiago/Getty)
Bankman-Fried wrote in the memo that Binance had been “engaging in a PR campaign against us.”
He wrote that the company “leaked a balance sheet; blogged about it; fed it to Coindesk; then announced very publicly that they were selling $500m of FTT in response to it while telling customers to be wary of FTX.” FTT was the symbol for FTX’s own cryptocurrency token.
In November 2022, CoinDesk reported that it obtained Alameda’s balance sheet and that the company was possibly in dire straits. This led to the run on FTX, when many FTX customers rushed to withdraw their money from the exchange, and ultimately the company’s bankruptcy.
Although Bankman-Fried noted in the memo that FTX was capitalized but not liquid, Ellison testified that out of the $12 billion in client assets that were reportedly at the exchange, only $4 billion were available to be processed for withdrawals.
Ellison testified that Alameda bribed a Chinese government official and even used the identities of Thai prostitutes to unlock $1 billion of frozen funds on other digital currency exchanges
Bankman-Fried stands accused of seven counts of fraud, conspiracy, and money laundering on his alleged use of FTX customer funds to cover the losses of his hedge fund, Alameda Research. He also allegedly used those funds to purchase real estate and cover other personal expenses. Bankman-Fried pled not guilty to all counts and faces up to 110 years in prison.
Sean Moran is a policy reporter for Breitbart News. Follow him on Twitter @SeanMoran3.