Sam Bankman-Fried, former CEO of FTX, expressed several concerns, including competition from Binance and the need for capital generation, ahead of the crypto exchange’s collapse, as revealed by court testimonies.
What Happened: Testifying in court on Wednesday, ex-Alameda CEO Caroline Ellison disclosed that Bankman-Fried was highly concerned about numerous issues, as reported by Cointelegraph.
His worries included persuading regulators to take action against its competitor crypto exchange, Binance, and raising funds from a Saudi Crown Prince, who is recognized for his investments in blockchain gaming via Saudi Arabia’s sovereign wealth fund.
Ellison’s personal notes about FTX and Alameda, which were highlighted by the prosecution, mirrored Bankman-Fried’s apprehensions. These also encompassed buying stocks of Snap Inc. and obtaining more funding from crypto lender BlockFi, which had earlier loaned over $660 million to Alameda.
Bankman-Fried reportedly held Ellison accountable for Alameda’s inadequate hedging and financial difficulties. While Ellison admitted that an improved hedging strategy could have assisted Alameda in surviving the crypto winter, she also pointed out that the company had substantial open-term loans and had used up billions from its credit line with FTX.
The cross-examination of Ellison by Bankman-Fried’s defense is slated to commence on October 12.
Why It Matters: These revelations provide a glimpse into the series of events leading up to the collapse of the crypto exchange.
Ellison on Wednesday also disclosed her role in preparing not one, but seven different balance sheets for Genesis, months before the company’s bankruptcy. Inner City Press reported that these balance sheets were tailored to present varying financial scenarios.
This development becomes even more pertinent considering Benzinga’s upcoming Future of Digital Assets conference on Nov. 14. Scheduled to host a gamut of industry stalwarts, the conference will undoubtedly spotlight the importance of ethical financial practices in the digital assets world, using Ellison’s testimony as a compelling backdrop.
Price Action: At the time of writing, Bitcoin BTC/USD was trading at $26,837.77, down 0.85% in the last 24 hours, according to Benzinga Pro.
Photo via Shutterstock.
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