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More than a week after FTX founder Sam Bankman-Fried officially appeared in court, the SBF trial has seen several key witnesses testify, including FTX co-founder Gary Wang, former Alameda CEO Caroline Ellison, Paradigm co-founder Matt Huang, and former FTX engineers.

Among them, Gary Wang, who was SBF's right-hand man, and Caroline Ellison, who was SBF's former girlfriend, are the most critical witnesses in this trial, revealing multiple details of insider trading and misappropriation of funds. For instance, Gary Wang's testimony mentioned, "The function for Alameda to steal customer funds was embedded in FTX's computer system as early as 2019"; "SBF allowed Alameda to withdraw funds without limit"…… Caroline Ellison revealed, "SBF asked her to prepare seven different balance sheets to hide billions of dollars in loans"; "SBF bribed Chinese officials to unlock a $1 billion account"…… Each testimony is explosive.

After Caroline Ellison's appearance, the testimonies of other upcoming witnesses remain noteworthy. Key witnesses who may be summoned to testify include BlockFi co-founder Zac Prince, former Alameda co-CEO Trabucco, and former Alameda software developer Christian Drappi. This article will continue to update the key witness testimonies in the SBF trial. Additionally, for the latest developments beyond the witness testimonies in the SBF trial, you can follow ChainCatcher's special tracking on this case “Continuous Tracking of the Latest Developments in the SBF Trial”.

Key Witness Testimonies Already Given

Caroline Ellison: Former Alameda CEO; SBF's ex-girlfriend, has pleaded guilty

In addition to being the former CEO of Alameda, Caroline Ellison was also in a romantic relationship with SBF, making her the most watched witness in this trial. Caroline Ellison has previously admitted to fraud charges and signed a plea agreement, with no tax crimes involved. In July of this year, Caroline Ellison's Google documents were made public, (“Diary of Former Alameda CEO Caroline Exposed: Relief After FTX Collapse, Feeling Happy”) revealing her role at Alameda and her personal entanglements with SBF.

On October 11, Caroline Ellison again testified against SBF and FTX on multiple "crimes." Key points of her testimony include:

1. FTX founder Sam Bankman-Fried instructed her to commit crimes such as "misappropriating customer funds." Ellison stated that Alameda misappropriated FTX customer funds for investments and political donations; after being appointed CEO of Alameda Research, she still reported to SBF, despite her requests, she did not have equity in Alameda, holding only a small stake in FTX; SBF instructed them to borrow as much money as possible and once mentioned wanting to buy more FTT. (Source link)

2. Alameda bribed Chinese officials with $100 million to unfreeze Alameda's trading accounts on Huobi and OKX. According to BitMEX Research citing Ellison's testimony, Alameda Research's trading accounts on Huobi and OKX were frozen in 2021, and they subsequently attempted to unfreeze the accounts through hiring lawyers, using various trading strategies, and bribing Chinese government officials. In November 2021, Alameda Research paid approximately $100 million to Chinese government officials in exchange for unfreezing the accounts, with the money divided into multiple parts sent to various cryptocurrency wallet addresses. According to Caroline Ellison, the account was connected to Chinese government officials to some extent and was likely used for bribery. (Source link)

3. SBF prepared seven balance sheets to cover up billions of dollars in loans. She and SBF did this before meeting with Matt Ballensweig, co-head of trading and lending at cryptocurrency lending firm Genesis, who requested the latest information on Alameda's balance sheet. Caroline Ellison stated, "SBF said not to send the balance sheet to Genesis." "We borrowed $10 billion from FTX and provided $5 billion in loans to our own executives and affiliated entities. We thought Genesis might share this information." "He wanted me to come up with other ways to present the information. He wanted me to hide some things on the balance sheet. So I prepared seven different balance sheets. I didn't want to be dishonest, but I presented alternatives to SBF and let him decide." According to court testimony, this incident occurred on June 19, 2022.

4. SBF sought to have regulators target Binance out of market competition. Ellison stated that SBF tried to find a way for regulators to target their competitor Binance to increase FTX's market share. However, she did not provide any details on how SBF planned to do this.

5. SBF used Alameda funds to purchase $600 million in Robinhood shares and transferred them to another FTX entity to avoid public disclosure. Ellison stated that when Alameda faced potential dangers due to unpaid loans from cryptocurrency lending firm Genesis and a potential market downturn in digital assets, SBF often dismissed her concerns and had her adjust calculations to make these situations more palatable. SBF still wanted to proceed with $3 billion in venture capital. Additionally, the more than $600 million in Robinhood shares purchased by SBF in May 2022 was paid for by Alameda, but when it came time to publicly disclose the acquisition, SBF requested to move these shares to another FTX entity, Emergent Fidelity, because he did not want to be associated with Alameda; the $2 billion from the venture fund FTX Ventures launched by SBF in January 2022 came from Alameda. (Source link)

*Recommended reading: *“Caroline Ellison's Latest Testimony: Bribing Chinese Officials to Unlock $1 Billion Account, SBF Once Wanted to Sell FTX Shares to Saudi Crown Prince”*

Gary Wang: Co-founder and CTO of FTX and Alameda Research, has pleaded guilty

Like Caroline Ellison, Gary Wang is not only a core executive of both FTX and Alameda but also one of the witnesses closely related to SBF on a personal level. Gary Wang became math camp partners with SBF in high school and later was SBF's roommate at MIT. Last December, Wang and Ellison both pleaded guilty to charges related to FTX's collapse.

Gary Wang provided the first full-day witness testimony in the SBF trial, during which he also revealed multiple insider details. Key points of his testimony include:

1. The function for Alameda to steal customer funds was embedded in FTX's computer system as early as 2019. Wang testified that the functionality required for Alameda to steal customer funds was embedded in FTX's computer system as early as 2019. Additionally, Alameda received three privileges on FTX compared to other customers. One of these was allowing Alameda to trade with more funds than it actually had in its account. As Wang previously testified, Alameda could withdraw unlimited funds from FTX.
This functionality was later exploited, resulting in the withdrawal of $8 billion in fiat and cryptocurrency, exceeding the amount the trading firm held in its accounts—roughly the same gap FTX faced when it failed to meet customer withdrawal requests last November. Wang clarified that the additional funds came from FTX customers who had not explicitly chosen to lend out their funds. (Source link)
2. SBF allowed Alameda to withdraw unlimited funds. Gary Wang stated that Alameda had a large credit limit to execute orders faster on the FTX platform and could withdraw unlimited funds. At the time of the FTX collapse, Alameda had already withdrawn $8 billion from the platform and had withdrawn $65 billion from its credit limit. Gary Wang also stated that his personal annual salary was $200,000, and he held 17% equity in FTX. SBF owned "about 65%" of the company. Meanwhile, SBF held 90% of Alameda Research, while he held only 10%. During his time at FTX, he was allowed to withdraw $200,000 from the company to buy a house and received up to $300 million in funding to invest in other startups. Gary Wang also stated that SBF was responsible for public-facing duties such as lobbying and talking to the media, while his responsibilities were limited to coding. (Source link)

3. The balance of the insurance fund published by FTX was generated by a random number generator. According to BitMEX Research citing FTX co-founder Gary Wang's testimony, Gary Wang stated that the balance of the insurance fund published by FTX was generated by a random number generator, and there were no FTT in the insurance fund, just digital dollars, with the listed numbers not matching those in the database, actually calculated separately, and the real numbers being lower than the fake ones. (Source link)

4. FTX customer balances equaled hot wallet assets, but there was an additional $8 billion liability. In November 2022, the customer balances of FTX matched the assets held in the hot wallet, but there was one significant exception: a hidden $8 billion liability named "fiat @." As customers began withdrawing assets from FTX in November 2022, SBF asked Gary Wang to calculate how much money Alameda Research needed to deposit on the exchange to cover the outflows. Wang testified on the fourth day of the SBF trial under direct questioning from government prosecutors, stating that excluding Alameda Research's accounts, the total of FTX customer balances matched the assets in FTX's hot wallet. However, he was unaware that there were issues with his calculations.

Gary Wang testified that he only got the complete picture when SBF asked him if he included "our Korean friends" in his calculations. Wang felt confused and sought confirmation from another former FTX executive, Nishad Singh, who told Wang that "Korean friends" actually referred to the $8 billion "fiat @" hole at the core of the FTX collapse.
The fiat@ account balance in FTX's internal database had been reassigned to an account named "seoyuncharles88@gmail.com," which was granted special privileges so that Alameda Research would not have to pay interest on the credit limit. Wang also confirmed that SBF was aware that FTX's financial situation was more transparent to the public and investors, while Alameda's financial situation was not. (Source link)

5. SBF drafted tweets in September last year to prepare for shutting down Alameda. SBF drafted a series of tweets (which were never published) two months before the FTX collapse (September 2022), planning to announce the closure of Alameda Research while considering its future. In the draft tweets, SBF referred to Alameda Research as one of his "greatest successes, even if briefly failed." The failure SBF referred to was Alameda losing millions of dollars worth of XRP tokens. In the draft tweets, SBF pointed fingers at his competitors, stating that claims about Alameda and FTX being too closely linked were "mainly spread by FTX's competitors, who were trying to distract people from their issues." Gary Wang also stated that SBF ultimately did not close Alameda Research because the company owed FTX $14 billion. (Source link)
Adam Yedidia: Former Senior Engineer at FTX

Former Senior Engineer at FTX Adam Yedidia testified in court last Thursday, stating that he met with SBF in June 2022 (just before FTX's collapse) and asked SBF about FTX's condition. SBF said, "Last year we were bulletproof. But this year we’re not (We 're not bulletproof). It may take six months to three years to correct this issue." Later, SBF also told Adam Yedidia that he had tried to raise funds from the UAE to bolster the trading platform's cash reserves, but the efforts were unsuccessful. (Source link)

Additionally, Adam Yedidia stated in court that the unusual way FTX handled customer deposits led to software errors that exaggerated the amount Alameda owed the trading platform's customers by $8 billion. In the early days of FTX, customers deposited fiat by remitting to Alameda instead of directly to FTX. This unusual relationship complicated the company's tracking of debts owed to customers. Yedidia stated that there was a software error that, by June 2022, showed that Alameda owed far more money than the actual amount. (Source link)

Matt Huang: Co-founder of Paradigm
Paradigm, an important investor in FTX, invested a total of approximately $278 million in FTX twice. Paradigm co-founder Matt Huang testified about the entire investment process. Matt Huang stated that the rapid growth of FTX's early market share excited him, but he was concerned about FTX's lack of a formal governance structure or even a board. SBF had told him that Alameda Research did not receive preferential treatment at FTX. (Source link)

Other Upcoming or Pending Witnesses

According to ChainCatcher's previous news, U.S. prosecutors indicated that after Caroline Ellison's trial, they expect to summon BlockFi co-founder Zac Prince and former Alameda software developer Christian Drappi. Additionally, prosecutors expect to complete the hearings in about four weeks, with the earliest conclusion on October 27. Assuming the defense presents reasons for appeal, it is expected to take another week and a half afterward, which means the trial may conclude as early as November 9. Earlier, the U.S. Department of Justice also announced that prosecutors plan to summon former FTX executives, customers, and investors from around the world as witnesses during the trial. Customers and investors holding FTX shares can explain their expectations regarding how FTX held their funds, while cooperating witnesses can describe "their interactions with the defendant and their understanding of the purpose of certain statements and actions by the defendant."

CoinDesk has disclosed the witness list in more detail in “SBF Trial Witness List Revealed: Former Lovers, Colleagues, Allies”, confirmed key witnesses include FTX engineering head Nishad Singh, financial market regulatory economist Andria van der Merwe, and University of Notre Dame professor Peter Easton.

Pending witnesses include: former Alameda Research co-CEO Sam Trabucco, former FTX chief compliance officer Dan Friedberg, and FTX Digital Markets co-CEO Ryan Salame.

There are also several defense witnesses, including corporate consultant Thomas Bishop, who specializes in forensic investigations and accounting issues, data analysis and forensics expert Brian Kim, and financial risk management expert Joseph Pimbley: University of Michigan finance and technology professor Andrew Di Wu.

From the perspective of the degree of association with FTX and SBF, the upcoming or pending witnesses include notable figures such as former co-CEO of Alameda Research Trabucco and former FTX engineering head Nishad Singh.

Trabucco: Former Co-CEO of Alameda Research

Trabucco may be one of the key witnesses with the closest personal ties to SBF, aside from Caroline Ellison and Gary Wang. Trabucco and Gary Wang both met SBF at a high school math camp and later attended MIT together. According to CoinDesk, Caroline Ellison served alongside Trabucco at Alameda Research, and Trabucco resigned just a year after joining in August 2022. In a previous Wall Street Journal article, Trabucco was not listed as one of the executives aware of FTX transferring customer funds to Alameda.

Recommended reading: “The Mysteriously Disappeared Former Alameda CEO, SBF's High School Close Friend Trabucco May Have Always Been an Important Informant in the FTX Case”

Nishad Singh: Former FTX Engineering Head, has pleaded guilty
Nishad Singh is the third member of SBF's core circle, following Gary Wang and Caroline Ellison, to plead guilty and cooperate with prosecutors. According to ChainCatcher's previous news, Nishad Singh pleaded guilty to six charges, including conspiracy to commit money laundering and wire fraud, in Manhattan court on February 28, 2023.

It is reported that Nishad Singh was another early employee of Alameda Research, and he was also one of the ten people living in a luxury penthouse in the Bahamas with SBF, as well as one of the three who controlled the keys to FTX's matching engine.

In addition to Trabucco and Nishad Singh, FTX Digital Markets co-CEO Ryan Salame and former FTX chief compliance officer Dan Friedberg are also key witnesses worth noting, but currently, although FTX Digital Markets co-CEO Ryan Salame has pleaded guilty and submitted documents related to the FTX collapse to federal prosecutors, according to previous reports by The New York Times, he will not testify. An earlier court document stated that if summoned to testify, he would invoke his Fifth Amendment right against self-incrimination. Former FTX chief compliance officer Dan Friedberg has also reportedly provided details about FTX to federal prosecutors. However, it remains uncertain whether he will testify.