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Former Alameda Research CEO Testifies About FTX’s Saudi Investment Plans

TL;DR

  • Ellison’s testimony shed light on the alleged plans to raise equity for FTX.
  • SBF reportedly mentioned the possibility of attracting an investment from the Saudi Crown Prince.
  • Mohammed bin Salman has been associated with various investments in the blockchain and gaming sectors through Saudi Arabia’s sovereign wealth fund. 

Former Alameda Research CEO, Caroline Ellison, took the stand in the criminal trial of Sam “SBF” Bankman-Fried, the CEO of FTX, on October 11, making startling revelations about the crypto exchange’s efforts to secure investment from Saudi Crown Prince Mohammed bin Salman (MBS). Ellison’s testimony shed light on the alleged plans to raise equity for FTX from MBS and the broader circumstances surrounding the crypto exchange’s downfall.

Potential investment from Saudi crown prince

Caroline Ellison testified in court that she had discussions with Sam Bankman-Fried in 2022 about hedging Alameda investments. During these conversations, Bankman-Fried reportedly mentioned the possibility of attracting an investment from Saudi Crown Prince Mohammed bin Salman (MBS) for FTX. This revelation came to light during Ellison’s testimony in Bankman-Fried’s ongoing criminal trial.

One of the key pieces of evidence presented in court was a journal maintained by Ellison, titled “Things Sam is Freaking Out About.” In this journal, Ellison noted several concerns, one of which was “raising funds from MBS.” The prosecutors had indicated back in August that they intended to present this journal as evidence during the trial. Ellison’s recent testimony confirmed the existence of these notes and their connection to discussions about FTX’s fundraising efforts.

Mohammed bin Salman, known as MBS, serves as the Crown Prince and Prime Minister of Saudi Arabia. He has been associated with various investments in the blockchain and gaming sectors through Saudi Arabia’s sovereign wealth fund. However, his involvement in global affairs has also been marred by controversy, including allegations linking him to the 2018 assassination of Washington Post journalist Jamal Khashoggi at the Saudi consulate in Istanbul.

Meeting between SBF and MBS

Reports from April indicated that Sam Bankman-Fried had met with Crown Prince Mohammed bin Salman in Saudi Arabia just weeks before FTX filed for bankruptcy. Bankman-Fried had reportedly been seeking to raise $1 billion for FTX, and Saudi investors were willing to contribute approximately $250 million, a sum coincidentally equivalent to the bail amount set for Bankman-Fried after his arrest in the United States.

Caroline Ellison is expected to continue her testimony through October 11 and into October 12, during which time Bankman-Fried’s lawyers will cross-examine her. Ellison has admitted to fraud during her tenure as the head of Alameda Research and has largely attributed the misuse of customer funds to Bankman-Fried, including allegations of directing her to provide misleading financial information to Genesis lenders.

Prosecutors in Sam Bankman-Fried’s criminal trial anticipate wrapping up their case either on October 26 or October 27. Following this, Bankman-Fried’s defense team will begin calling witnesses. The FTX CEO has pleaded not guilty to seven criminal counts related to fraud at FTX, with an additional five charges set to be addressed in a separate trial scheduled for March 2024.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

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