SBF's Trial Heats Up: Alameda's Former CEO Highlights FTX Ethical Standards

<p>Caroline Ellison, the former Chief Executive Officer
of Sam Bankman-Fried (SBF)'s crypto hedge fund Alameda Research, took the stand to
testify against him on the second day of her appearance today (Wednesday). Her
testimony revealed aspects of SBF’s character, who faces allegations of fraud
related to the collapse of FTX. </p><p>In a report by Reuters, Ellison described SBF as a
"utilitarian" who believed that the only moral rule that mattered was
doing the greatest good for the greatest number of people. She further stated
that he didn't think basic rules like "don't lie" or "don't
steal" fit into his utilitarian framework. This perspective allegedly created
an environment where people around him felt comfortable doing what they knew
was ethically wrong.</p><p>SBF's Allegations of Misappropriation</p><p>Ellison's testimony also delved into SBF's
efforts to support his companies during challenging times. She claimed that he
suggested selling a stake in <a href="https://www.financemagnates.com/tag/ftx/" target="_blank" rel="follow">FTX</a> to Saudi Arabian Crown Prince Mohammed bin
Salman and called for regulators to take strict actions against the rival
crypto <a href="https://www.financemagnates.com/terms/e/exchange/">exchange</a>, Binance. While Ellison mentioned that regulators had assured
such action, specific details remain scarce.</p><blockquote><p lang="en" dir="ltr">A key witness in the FTX fraud trial, Caroline Ellison, the former CEO of Sam Bankman-Fried's hedge fund, Alameda Research, testified against him at a New York City court <a href="https://t.co/Crb4Vts4hA">https://t.co/Crb4Vts4hA</a> <a href="https://t.co/tG7oSKIOZ6">pic.twitter.com/tG7oSKIOZ6</a></p>— Reuters Business (@ReutersBiz) <a href="https://twitter.com/ReutersBiz/status/1712068024977535116?ref_src=twsrc%5Etfw">October 11, 2023</a></blockquote><p>Additionally, Ellison told the jury about a
significant bribe paid to Chinese officials by a group of FTX and Alameda
executives, Coindesk reported. This was done to secure funds that had been
locked on Chinese exchanges. Although the alleged bribery raises significant
ethical and legal concerns, SBF has not been charged in relation to these
allegations. </p><p>Judge Denies SBF's Defense Requests</p><p>As the trial unfolded, Judge Lewis Kaplan denied
multiple requests from SBF’s defense team. The defense sought to raise issues
related to the lack of crypto-specific regulations in the US regulations, potential
recoveries from the FTX <a href="https://www.financemagnates.com/terms/b/bankruptcy/">bankruptcy</a>, and SBF's donations.</p><p>On her first appearance in court yesterday
(Tuesday), Ellison <a href="https://www.financemagnates.com/cryptocurrency/sam-bankman-fried-accused-by-former-alameda-ceo-of-directing-fraud-at-ftx/" target="_blank" rel="follow">painted a picture of SBF's inclination</a> toward borrowing
substantial sums of money to support Alameda Research's operations. She
detailed how he directed her and others to secure large loans to finance the
dealings of the hedge fund. The trial further unveiled the complexities of
using FTX's native token, FTT, as collateral for the loans.</p><p>The prosecution's case against SBF centers around
the <a href="https://www.financemagnates.com/cryptocurrency/sam-bankman-frieds-day-in-court-what-really-happened-at-ftx/" target="_blank" rel="follow">allegation that he misappropriated billions</a> in customer funds to support
his companies, including Alameda Research, buy real estate, and donate more
than $100 million to US political campaigns. </p>

This article was written by Jared Kirui at www.financemagnates.com.