- The jury in the trial against Sam Bankman-Fried has been shown evidence of his belief that Binance leaked Alameda’s balance sheet to the media in 2022
- Caroline Ellison, former CEO of Alameda Research, presented a memo in which Bankman-Fried accused Binance and its CEO Changpeng Zhao of leaking the balance sheet which led to its eventual collapse
- The memo highlighted concerns about FTX’s liquidity and the involvement of potential investors like Justin Sun, who had ties to Zhao but was still considered for an FTX rescue package.
Sam Bankman-Fried believed that Binance leaked Alameda’s balance sheet to the media in 2022, an act that triggered a run on FTX which eventually killed it. The claim arrived via a memo written by Bankman-Fried and presented during his trial by Caroline Ellison, the former CEO of Alameda Research, in which Bankman-Fried accuses Binance and its CEO Changpeng Zhao of feeding the balance sheet to Coindesk. This act triggered FTX and Alameda Research’s downfall. This didn’t stop Bankman-Fried from turning to Binance prior to FTX’s ultimate collapse.
Memo Implicates Binance
Ellison has been the star witness during the trial against her former boss and lover, and part of her evidence was a memo dated November 6, 2022, where Bankman-Fried outlined potential investors who could help rescue FTX and other parties to contact for financial assistance.
According to the document, Bankman-Fried opined that Binance had been involved in a “PR campaign against us,” adding that it was Binance that had “leaked a balance sheet, blogged about it, fed it to CoinDesk, and then publicly announced the sale of $500 million worth of FTT in response to it, while cautioning customers to be wary of FTX.” The relationship between Zhao and Bankman-Fried, which was known to be frosty due to the different approaches the CEOs took to running their own companies, was laid bare in Michael Lewis’ recent book on Sam Bankman-Fried, “Going Infinite.”
CoinDesk reported on November 2, 2022, that it had obtained Alameda’s balance sheet, which revealed a massive holding in FTT, raising concerns about the firm’s financial standing. This event played a significant role in the events leading up to the rush on FTX and its eventual bankruptcy.
Sun and Zhao Rejected Buyouts
The memo also indicated that Bankman-Fried acknowledged FTX was well-capitalized but not entirely liquid. Ellison clarified this by stating that out of the $12 billion in client assets reportedly held by the exchange, only $4 billion was available for processing withdrawals.
Additionally, the memo revealed that Justin Sun, founder of the Tron network and an adviser to Huobi, was considered a potential investor, but Bankman-Fried noted that he had close ties to Zhao. Despite these misgivings, the then-CEO still went cap in hand to both Sun and Zhao, both of whom eventually pulled out of any FTX rescue package.
