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🧵1/Ω
Thoughts from SBF’s 2nd day of cross examination:
Today went very, very badly for Mr. Bankman-Fried but it was still kind of a shame the jury didn’t get to witness the absolute train wreck of his first attempt especially this part:
Thoughts from SBF’s 2nd day of cross examination:
Today went very, very badly for Mr. Bankman-Fried but it was still kind of a shame the jury didn’t get to witness the absolute train wreck of his first attempt especially this part:
https://twitter.com/Cryptadamist/status/1717684442171379973
🧵2/Ω
Things got off to a rough start when SBF tried to say that the million and one times he claimed that Alameda was just like any other FTX customer in every way he secretly was communicating that “every way” meant “one way”: Alameda didn’t front run FTX's customers.
Things got off to a rough start when SBF tried to say that the million and one times he claimed that Alameda was just like any other FTX customer in every way he secretly was communicating that “every way” meant “one way”: Alameda didn’t front run FTX's customers.
🧵3/Ω
Cue AUSA bringing up approximately a bazillion tweets, emails, slack messages, etc. where SBF said Alameda was just like any other customer followed by the question “does it say ‘in terms of frontrunning customers’ here?”
Cue AUSA bringing up approximately a bazillion tweets, emails, slack messages, etc. where SBF said Alameda was just like any other customer followed by the question “does it say ‘in terms of frontrunning customers’ here?”
🧵4/Ω
SBF answered each question with some combination of
1. "not explicitly"
2. "maybe not in that wording"
3. "not sure about the phrasing¹"
4. "perhaps not with that phraseology¹"
Differentiated by an increasingly panicked tone of voice.
¹ SBF said #3 three times in a row
SBF answered each question with some combination of
1. "not explicitly"
2. "maybe not in that wording"
3. "not sure about the phrasing¹"
4. "perhaps not with that phraseology¹"
Differentiated by an increasingly panicked tone of voice.
¹ SBF said #3 three times in a row
🧵5/Ω
As an aside SBF definitely got a stern talking to from his lawyers about not answering every question with his trademark “substantial digressions", instead falling back on the classic "I don't recall" so many times I had to abbreviate it "IDR" in my notes.
As an aside SBF definitely got a stern talking to from his lawyers about not answering every question with his trademark “substantial digressions", instead falling back on the classic "I don't recall" so many times I had to abbreviate it "IDR" in my notes.
🧵6/Ω
SBF may be an egomaniac but he’s smart enough to recognize at least some good advice when he hears it. Getting publicly rebuked by the man in charge of decisions about how many decades you will spend in the penitentiary apparently can pierce the bubble for him (yay!).
SBF may be an egomaniac but he’s smart enough to recognize at least some good advice when he hears it. Getting publicly rebuked by the man in charge of decisions about how many decades you will spend in the penitentiary apparently can pierce the bubble for him (yay!).
🧵7/Ω
Unfortunately for SBF every time he said “I don’t recall” or “I’m not sure about the context” the next words out of AUSA Sassoon were “Let's take a look at govt exhibit XYZ”, after which a document clearly showing that yep, he said or did that, would appear before the jury.
Unfortunately for SBF every time he said “I don’t recall” or “I’m not sure about the context” the next words out of AUSA Sassoon were “Let's take a look at govt exhibit XYZ”, after which a document clearly showing that yep, he said or did that, would appear before the jury.
🧵8/Ω
The jury did at least get a hint of Thursday’s glory when SBF attempted to get into the definitional issues of what “allow negative” may or may not mean.
The jury did at least get a hint of Thursday’s glory when SBF attempted to get into the definitional issues of what “allow negative” may or may not mean.
https://twitter.com/Cryptadamist/status/1717688568322179407
🧵9/Ω
And the jury did actually get some education about important definitional issues, like what exactly is a "shitcoin daytrader", from important historical records.
Jury duty pay is low but wisdom like this lasts a lifetime.
And the jury did actually get some education about important definitional issues, like what exactly is a "shitcoin daytrader", from important historical records.
Jury duty pay is low but wisdom like this lasts a lifetime.
https://twitter.com/Bitfinexed/status/1591929530939473920
🧵11/Ω
Subjectively it was noted that the pitch of SBF’s unhappy “yups” in responses to questions like “Is that you in the video saying you didn’t call your company Shitcoin Daytraderz because you wanted to mislead banks into giving you accounts?” started rising around this time.
Subjectively it was noted that the pitch of SBF’s unhappy “yups” in responses to questions like “Is that you in the video saying you didn’t call your company Shitcoin Daytraderz because you wanted to mislead banks into giving you accounts?” started rising around this time.
🧵12/Ω
AUSA Sassoon's best zinger was related to airline travel:
AUSA: "Did you travel to the Superbowl in a private jet?"
SBF: "I don't recall."
AUSA: "Do you not recall because you traveled by private jet so much that it wasn't in any way notable?"
(laughter)
AUSA Sassoon's best zinger was related to airline travel:
AUSA: "Did you travel to the Superbowl in a private jet?"
SBF: "I don't recall."
AUSA: "Do you not recall because you traveled by private jet so much that it wasn't in any way notable?"
(laughter)
🧵13/Ω
For the record SBF tried to protest saying that actually most of his traveling was by "chartered plane", not "private jet", a distinction which was of course totally relatable to the 17 working class NYers in the jury.
For the record SBF tried to protest saying that actually most of his traveling was by "chartered plane", not "private jet", a distinction which was of course totally relatable to the 17 working class NYers in the jury.
🧵14/Ω
Another fun zinger was when AUSA asked SBF if he told investors and customers that FTX's custom best-in-class risk mgmt systems would "prevent clawbacks".
SBF: "It reduced the risk of clawbacks"
AUSA: "Let's go to the tape..."
Another fun zinger was when AUSA asked SBF if he told investors and customers that FTX's custom best-in-class risk mgmt systems would "prevent clawbacks".
SBF: "It reduced the risk of clawbacks"
AUSA: "Let's go to the tape..."
🧵15/Ω
AUSA: “What is this document?”
SBF: “I believe that’s the FTT whitepaper we sent to investors.”
AUSA: “What does it say in the really big font?”
SBF: “‘Significantly reduce the risk of clawbacks'”
AUSA: “I asked about the big font.”
SBF: “'Preventing', then ‘clawbacks’”
AUSA: “What is this document?”
SBF: “I believe that’s the FTT whitepaper we sent to investors.”
AUSA: “What does it say in the really big font?”
SBF: “‘Significantly reduce the risk of clawbacks'”
AUSA: “I asked about the big font.”
SBF: “'Preventing', then ‘clawbacks’”
🧵16/Ω
Clawbacks were in general kind of a fun topic:
AUSA: "Did you know if FTX had FAQs for customers?"
SBF: "I'm not sure"
AUSA: "Were you aware that in the FAQ it said 'FTX does not have clawbacks'?"
SBF: "I don't recall that phraseology."
AUSA: "Let's go to the tape..."
Clawbacks were in general kind of a fun topic:
AUSA: "Did you know if FTX had FAQs for customers?"
SBF: "I'm not sure"
AUSA: "Were you aware that in the FAQ it said 'FTX does not have clawbacks'?"
SBF: "I don't recall that phraseology."
AUSA: "Let's go to the tape..."
🧵17/Ω
Then we got into the heart of the matter: Alameda’s $65 billion line of credit (“LOC”).
AUSA: “Did you know about the $65bn LOC?”
SBF: "Many market makers had LOCs."
AUSA: "That was not my question."
SBF: "I'm not sure what exactly you are referring to"
(almost verbatim)
Then we got into the heart of the matter: Alameda’s $65 billion line of credit (“LOC”).
AUSA: “Did you know about the $65bn LOC?”
SBF: "Many market makers had LOCs."
AUSA: "That was not my question."
SBF: "I'm not sure what exactly you are referring to"
(almost verbatim)
🧵18/Ω
AUSA: "Let's go to the tape..."
Proceeds to show spreadsheet showing all market makers on FTX and the size of the LOC.
- Alameda has $65 billion
- the next highest is $150 million, which is 99.8% lower than $65 billion
AUSA: "Let's go to the tape..."
Proceeds to show spreadsheet showing all market makers on FTX and the size of the LOC.
- Alameda has $65 billion
- the next highest is $150 million, which is 99.8% lower than $65 billion
🧵19/Ω
Then things veered into the absurd:
1. AUSA cited SBF's 3 day old testimony that yeah he knew about it
2. SBF "did not recall" said testimony
3. His lawyer objected
4. The judge was like "gtfo u really think testimony under oath can’t be used as evidence?"
#REKT
Then things veered into the absurd:
1. AUSA cited SBF's 3 day old testimony that yeah he knew about it
2. SBF "did not recall" said testimony
3. His lawyer objected
4. The judge was like "gtfo u really think testimony under oath can’t be used as evidence?"
#REKT
🧵20/Ω
Presumably his lawyers objected because that testimony was given under oath but SBF only thought he was in front of the judge.
Nice try team. Telling a federal judge sworn testimony in his own courtroom is inadmissable gets an A for effort & at least a B for creativity.
Presumably his lawyers objected because that testimony was given under oath but SBF only thought he was in front of the judge.
Nice try team. Telling a federal judge sworn testimony in his own courtroom is inadmissable gets an A for effort & at least a B for creativity.
🧵21/Ω
But of course it didn't really matter, because next up was metadata produced by Google about who exactly had created this spreadsheet.
Sadly where I and everyone else saw "created_by: sam@alameda-research.com" SBF had to admit he wasn't smart enough to interpret metadata.
But of course it didn't really matter, because next up was metadata produced by Google about who exactly had created this spreadsheet.
Sadly where I and everyone else saw "created_by: sam@alameda-research.com" SBF had to admit he wasn't smart enough to interpret metadata.
🧵22/Ω
High functioning spectrum disorder is not without it's challenges, I guess, and inability to interpret metadata is apparently one of them, poor guy.
High functioning spectrum disorder is not without it's challenges, I guess, and inability to interpret metadata is apparently one of them, poor guy.
🧵23/Ω
Thing went on like this for a while on many topics. Some sample SBF responses that gave some variety to the myriad "I don't recall"s:
- "I'm not saying I didn't say that"
- "Not in those words specifically"
- "I don't think I said it that way"
Let's roll the tape...
Thing went on like this for a while on many topics. Some sample SBF responses that gave some variety to the myriad "I don't recall"s:
- "I'm not saying I didn't say that"
- "Not in those words specifically"
- "I don't think I said it that way"
Let's roll the tape...
🧵24/Ω
Some guy named "Zeke Foe" came up like ten to twenty times. Apparently Zeke Foe had been in The Bahamas before and after the collapse of FTX. Apparently after the collapse SBF had admitted to Mr. Foe (on the record!) that yeah, he misused the funds.
Some guy named "Zeke Foe" came up like ten to twenty times. Apparently Zeke Foe had been in The Bahamas before and after the collapse of FTX. Apparently after the collapse SBF had admitted to Mr. Foe (on the record!) that yeah, he misused the funds.
🧵25/Ω
SBF had no recollection of this. Being handed a copy of the book with the exact quote did not help either.
Spectrum disorder must be rough.
SBF had no recollection of this. Being handed a copy of the book with the exact quote did not help either.
Spectrum disorder must be rough.
https://twitter.com/ZekeFaux/status/1719093674867306810
🧵26/Ω
While no one can see into the mind of another human being, much less a god like #GodEmperorSBF, I got the impression from the increasingly frantic eye movements that somewhere around here SBF was thinking that maybe this whole "testifying" thing might have been a mistake.
While no one can see into the mind of another human being, much less a god like #GodEmperorSBF, I got the impression from the increasingly frantic eye movements that somewhere around here SBF was thinking that maybe this whole "testifying" thing might have been a mistake.
🧵27/Ω
Some other tidbits of interest:
1. SBF implied that Alameda wasn’t the only market maker who might have had the ability to withdraw their LOC as cash
2. Ryan Salame was called a “loyal employee”.
It’s hard out here for a co-CEO:
Some other tidbits of interest:
1. SBF implied that Alameda wasn’t the only market maker who might have had the ability to withdraw their LOC as cash
2. Ryan Salame was called a “loyal employee”.
It’s hard out here for a co-CEO:
https://twitter.com/Cryptadamist/status/1712221495470985726
🧵28/Ω
Then we got into another important topic: SBF’s penchant for illegally backdating financial documents.
Then we got into another important topic: SBF’s penchant for illegally backdating financial documents.
🧵29/Ω
It was pointed out by AUSA that several FTX spreadsheets had defied the conventional laws of space and time:
1. One showed FTX’s annualized income for 2021 as ~$700mm
2. Another, created later for the purpose of raising money, showed $1.0bn
The magic of ecoserum...
It was pointed out by AUSA that several FTX spreadsheets had defied the conventional laws of space and time:
1. One showed FTX’s annualized income for 2021 as ~$700mm
2. Another, created later for the purpose of raising money, showed $1.0bn
The magic of ecoserum...
🧵30/Ω
Moving on to SBF’s favorite topic: hedging (or more specifically the lack of it) as the root of all evil.
Like original sin, knowledge, and many other evils, this evil was a woman's fault.
Moving on to SBF’s favorite topic: hedging (or more specifically the lack of it) as the root of all evil.
Like original sin, knowledge, and many other evils, this evil was a woman's fault.
🧵31/Ω
As all financial professionals are well aware a properly hedged position reduces the risk that the $1.1 billion you sent to a sketchy bitcoin mining company in Kazakhstan will turn out to be a losing proposition to 0%.
Or at least, almost 0% (according to SBF).
As all financial professionals are well aware a properly hedged position reduces the risk that the $1.1 billion you sent to a sketchy bitcoin mining company in Kazakhstan will turn out to be a losing proposition to 0%.
Or at least, almost 0% (according to SBF).
🧵32/Ω
Unfortunately for SBF it is also the case that if the risk that a bunch of Kazakh crypto bros not returning your customers’ $1.1 billion is even an infinitesimal bit higher than 0%, that’s, you know, investment fraud.
Unfortunately for SBF it is also the case that if the risk that a bunch of Kazakh crypto bros not returning your customers’ $1.1 billion is even an infinitesimal bit higher than 0%, that’s, you know, investment fraud.
🧵32/Ω
Turned out the risk was significantly higher than 0%! In fact that investment is now down an impressive 99% or something. Who ever could have guessed?
Apparently not SBF.
Spectrum disorder etc.
Turned out the risk was significantly higher than 0%! In fact that investment is now down an impressive 99% or something. Who ever could have guessed?
Apparently not SBF.
Spectrum disorder etc.
🧵33/Ω
Then we got into another fun topic: the $600mm worth of shares of $HOOD purchased with customer funds that were basically FTX’s only concrete asset of value at the time the ship went down.
Turned out these shares were actually owned by a guy named "Sam Bankman-Fried".
Then we got into another fun topic: the $600mm worth of shares of $HOOD purchased with customer funds that were basically FTX’s only concrete asset of value at the time the ship went down.
Turned out these shares were actually owned by a guy named "Sam Bankman-Fried".
🧵34/Ω
Or at least they were owned by company owned by a guy named Sam Bankman-Fried, which is weird because the money used to purchase them was not owned by Sam Bankman-Fried. Funny, right? The lord works in mysterious ways.
Or at least they were owned by company owned by a guy named Sam Bankman-Fried, which is weird because the money used to purchase them was not owned by Sam Bankman-Fried. Funny, right? The lord works in mysterious ways.
🧵35/Ω
But wait - the company that held title to these $600mm in $HOOD shares was not, it turned out, owned by Sam Bankman-Fried. As SBF informed the court room this company was owned by a company owned by Sam Bankman-Fried *and* Gary Wang.
But wait - the company that held title to these $600mm in $HOOD shares was not, it turned out, owned by Sam Bankman-Fried. As SBF informed the court room this company was owned by a company owned by Sam Bankman-Fried *and* Gary Wang.
🧵36/Ω
This company, it turned out, had a semi-legit structure, up to and including an official board of directors with independent decision making power. And who was on this board? The official letterhead suggested an answer:
"Sam Bankman-Fried, Chairman / Sole Member"
This company, it turned out, had a semi-legit structure, up to and including an official board of directors with independent decision making power. And who was on this board? The official letterhead suggested an answer:
"Sam Bankman-Fried, Chairman / Sole Member"
🧵37/Ω
Unimportant really though, because SBF informed the court that he didn't 𝘮𝘦𝘢𝘯 to be the sole member of the board with all the decision making power. It was just, you know, an accident.
An accident that placed $600mm at his sole discretion, yes, but hey mistakes happen
Unimportant really though, because SBF informed the court that he didn't 𝘮𝘦𝘢𝘯 to be the sole member of the board with all the decision making power. It was just, you know, an accident.
An accident that placed $600mm at his sole discretion, yes, but hey mistakes happen
🧵38/Ω
Once FTX had declared bankruptcy there was a fair amount of tussling over who, exactly, owned these $600mm of $HOOD.
Once FTX had declared bankruptcy there was a fair amount of tussling over who, exactly, owned these $600mm of $HOOD.
🧵39/Ω
AUSA: “Did you tell anyone that you wanted to ask yr broker to hand over the shares to your control¹ bc maybe they would just 'not think about it' and turn them over²?
SBF: "I don't recall."
AUSA: "Let's roll the tape..."
¹ not the bankruptcy estate
² illegally
AUSA: “Did you tell anyone that you wanted to ask yr broker to hand over the shares to your control¹ bc maybe they would just 'not think about it' and turn them over²?
SBF: "I don't recall."
AUSA: "Let's roll the tape..."
¹ not the bankruptcy estate
² illegally
🧵40/Ω
(Email from SBF is projected on screen with words to the effect of "should i just ask my broker for the $600mm in $HOOD shares bc maybe they just won't think about it and hand them over")
(Email from SBF is projected on screen with words to the effect of "should i just ask my broker for the $600mm in $HOOD shares bc maybe they just won't think about it and hand them over")
🧵41/Ω
At this point SBF tried to interject with "but i wanted to ask them for the $600mm so i could give it back to customers" whereupon the judge was all "STFU dumbass no one asked you that" coupled with "court reporter strike those words from the transcript."
At this point SBF tried to interject with "but i wanted to ask them for the $600mm so i could give it back to customers" whereupon the judge was all "STFU dumbass no one asked you that" coupled with "court reporter strike those words from the transcript."
🧵42/Ω
It's a shame really because if SBF had gotten his hands on that $600 million he almost certainly could have degen gamboled his way back to solvency in just a few days. Creditors really missed out here.
It's a shame really because if SBF had gotten his hands on that $600 million he almost certainly could have degen gamboled his way back to solvency in just a few days. Creditors really missed out here.
🧵43/Ω
"Shitcoin daytrader" was not the only term of art SBF, in his beneficence, tried to educate the jury about. Later in the day we got into "margin trading".
AUSA: "Taking money from customers is not margin trading."
SBF: "I'm not sure I agree with that."
🤔
"Shitcoin daytrader" was not the only term of art SBF, in his beneficence, tried to educate the jury about. Later in the day we got into "margin trading".
AUSA: "Taking money from customers is not margin trading."
SBF: "I'm not sure I agree with that."
🤔
🧵43/Ω
SBF helpfully continued his educational crusade with "I'd be happy to explain what I mean" whereupon AUSA Sassoon, in one of the coldest burns of the trial, just totally ignored him and moved on to the next topic.
SBF helpfully continued his educational crusade with "I'd be happy to explain what I mean" whereupon AUSA Sassoon, in one of the coldest burns of the trial, just totally ignored him and moved on to the next topic.
🧵44/Ω
There was more - a lot more. So much more that my penmanship muscles probably got at least 50% stronger in one single workout. But those were a lot of the highlights.
Of course there were other highlights:
There was more - a lot more. So much more that my penmanship muscles probably got at least 50% stronger in one single workout. But those were a lot of the highlights.
Of course there were other highlights:
https://twitter.com/molly0xFFF/status/1719037201424490844
🧵45/Ω
Zeke Foe has fleshed the specifics of the things SBF doesn't remember saying to Zeke foe on the record that now appear in Zeke Foe's book:
Zeke Foe has fleshed the specifics of the things SBF doesn't remember saying to Zeke foe on the record that now appear in Zeke Foe's book:
https://twitter.com/ZekeFaux/status/1719182803005313496
🧵46/Ω
But don't take my word for it, here's @overpricedjpegs to explain it for you:
But don't take my word for it, here's @overpricedjpegs to explain it for you:
🧵46/Ω
guess should be using that #ftxtrial hashtag from now on
also i'm nominating @overpricedjpegs as my avatar on this plane of existence. she speaks for me:
guess should be using that #ftxtrial hashtag from now on
also i'm nominating @overpricedjpegs as my avatar on this plane of existence. she speaks for me:
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