With SBF’s fraud trial in its third week, we’ve now had testimonies from three members of Sam Bankman-Fried’s inner circle: Gary Wang, Caroline Ellison and Nishad Singh.
Ellison testified last week that she felt an “overwhelming feeling of relief” when FTX collapsed, because it lifted her “constant state of dread” about the way FTX customer’s deposits were being used to repay Alameda Research’s loans.
“I felt a sense of relief that I didn’t have to lie anymore,” she said.
Then, on Thursday, the court heard a recording of Ellison telling Alameda employees in a meeting last year (around the time of the FTX collapse) that it was Bankman-Fried who had approved using FTX funds. Ellison said she didn’t know at the time that there was an investigation into FTX, so it’s a key bit of evidence because it could undermine the defence’s argument that her testimony was spun to get Bankman-Fried in trouble and win leniency for herself.
Next up was Nishad Singh, the former director of engineering. (Click here for the Reuters guide to who’s who.) He painted a vivid picture of how Bankman-Fried spent the money prosecutors say was stolen. Singh said Bankman-Fried’s $1.1 billion spend on FTX endorsement deals “reeked of excess and flashiness”. Bankman-Fried’s lawyer pushed back, saying FTX’s investments were not “reckless and frivolous” and that there was “way more to it”.
To be sure, Bankman-Fried has pleaded not guilty, and argues that while he made mistakes running FTX, he did not steal funds.
But while his trial combs over the dramatic collapses of 2022, there’s been plenty happening elsewhere in the crypto world. Crypto’s role in funding Palestinian militant group Hamas has come into focus this week. Researchers say that Israel has seized “tens of millions of dollars” of crypto from Hamas-linked addresses in recent years, and that Hamas fundraising to crypto addresses typically increases after rounds of violence. In the U.S., more than a hundred lawmakers, including Senator Elizabeth Warren, sent a letter to the U.S. Treasury Department and the White House, expressing “grave concern” about digital assets being used to fund Hamas and an affiliated group called Palestinian Islamic Jihad.
“Congress and this administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy,” the letter said.
Speaking of risk, the International Monetary Fund spoke about its engagement with El Salvador and reiterated that it doesn’t support the country using bitcoin as legal tender. The European Union’s securities watchdog said that, even when the EU’s new crypto rules come in, investors should still be aware that there is no such thing as a “safe” cryptoasset, given the operational and security risks involved.
Bitcoin jumped to nearly $30,000 on Monday, gaining around $2,000 in a matter of minutes, after crypto news outlet Coin Telegraph said on social media platform X, formerly known as Twitter, that the SEC had approved BlackRock’s spot bitcoin ETF application. (It hadn’t. The application is still pending.) When traders realised it wasn’t true, bitcoin quickly fell back down.
