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Feb 7 6 tweets 3 min read Read on X
COPA vs CSW Day 3

CSW is on the witness stand for his second day of cross-examination. COPA began by questioning why CSW disputed the credibility of the forensic document experts, given their string CVs. The judge then intervened and asked CSW why he could not put forward a suitable expert document witness. CSW responded by claiming:

· All the good expert witnesses CSW put forward were fired

· CSW’s old lawyers Travers Smith and Christen Ager-Hanssen put forward the flawed experts

· This is ultimately why CSW fired Travers Smith and appointed new lawyers.

🧵
As for how Bitcoin rules are enforced, the judge started asking CSW some questions. CSW responded with confidence and aggression.

Judge: You mentioned it would be easy to get a legal order against a dishonest actor, how do you determine a dishonest actor?

CSW: If you have 2 or 3 large actors, that control say 60%, you can easily have an order against them. Many of the nodes are on AWS, I have many dealings with AWS. If they see an attacker they will shut off the network very quickly.

Judge: Is a dishonest actor anyone not following the rules?

CSW: By definition, as in the whitepaper. This means rules. Rules are more than the agreement. For example rules in a club include UK law. If I run a cricket club, that includes UK law. I can’t set the rules to be whatever I want
One of the documents, with a date in 2005, which was put in evidence by CSW, supporting the claim CSW is Satoshi. The document contained passages that were in the Bitcoin whitepaper, therefore if the document is authentic it would support the claim that CSW was Satoshi. The document included meta data, indicating the document was created by Open Office, using a version of Open Office not released until after the supposed creation date.

CSW appeared to admit in court that he altered the meta data on purpose to make it look like the document was produced in the future, but it was actually produced in 2005. CSW, would not clarify why he did this, but he stated a potential reason was to demonstrate to students that he could alter meta data.
There is another document put into evidence from CSW, to support the claim he is Satoshi. This document is dated 2008 and has meta data dating the document in 2008

This document contains references to Bitcoin Cash (BCH). Bitcoin Cash was of course created in 2017, well after 2008
CSW also included as evidence, what he says was an early draft of the Bitcoin whitepaper, with meta data saying the draft was created in May 2008. If authetic, the document would support the claim that CSW is Satoshi.

The expert witness, Mr Madden, noted that the day, hour, minutes and seconds in the meta data for the creation date matched the "real" published Bitcoin whitepaper from 2009 exactly, only the month and year were different.

CSW was asked about this and if this was a coincidence. CSW's evidence was that this was not a coincidence. CSW explained that the document creation timestamp meta data, was actually manually inserted by him, it was not auto generated. CSW just changed the year and month to match the actual date, and he didn't bother to change the day, hour, minute or seconds.
There was another early version of the whitepaper presented, which if authetic, would support the claim that CSW was Satoshi.

This version of the whitepaper, had hyphens removed in places where there were line breaks in the published authetic version of the whitepaper. For instance, ”proof-of-work”, had the 2nd hyphen removed in some instances.

CSW was asked by COPA:

"And it just happened to fall at those points where there
are line breaks in the original of the Bitcoin White Paper? That’s pure chance?"

CSW explained this as follows:

"No, that’s actually setting the the line spacing, etc. One of the reasons I note this , and I have a section in my book, the forensic one, noting that doing some of these weird things as I ’ve got in my LaTeX files is a manner of actually using steganographic watermarking. So while I was writing the White Paper, I did a whole lot of stupid playing around because I was also writing that other book."

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More from @BitMEXResearch

Feb 5
Day 17 of the Bitcoin ETFs, is also day 1 of the COPA vs CSW trial

We are here in court

The hearing started at 10:30 UTC. Today each side will present their skeleton arguments and tomorow CSW will begin his case

🧵 Image
The opening skeleton argument by COPA:

"CWS’s conduct is deadly serious. He has terrorised bloggers who dispute his claim. This is done with the backing of Calvin Ayre"
Bitcoin Whitepaper Latex Files

"CWS only stopped editing the Latex files which he claims were the original Bitcoin whitepaper, literally the day before he handed over the Latex files to the legal teams, on 12 Dec 2023."

A time chart of these edits was shown in court. CSW's search history was shown, where he Googled if the Bitcoin whitepaper was written in Latex.
Read 23 tweets
Jan 23
Bitcoin Spot ETFs Day 7 Flow

Flow data out for all prioviders. Total net outflow for day 7 is $87.5m. Third net outflow day so far.

[1/5] 🧵 Image
As the below chart shows, all the providers combined could not overcome GBTC in day 3, day 5 or day 7

$ million

[2/5] 🧵 Image
Blackrock continues to perform well and is winning the race so far.

After 7 days ($m)

1. Blackrock +$1,689m 🥇
2. Fidelity +$1,441m 🥈
3. Bitwise +$492m 🥉
...
10. GBTC -$3,447m
GRANT TOTAL +$1,089m

[3/5] 🧵 Image
Read 6 tweets
Oct 27, 2023
SBF Trial – 27 October 2023 – SBF Direct Examination from the defense

Q. Did you defraud anyone?
A. No, I did not.
Q. Did you take customer funds?
A. No.
Q. We're going to talk in detail about what happened at FTX, but can you tell us big picture.
A. Yeah. At a high level, there are multiple different types of exchanges. There are spot exchanges, which is where a customer deposits a hundred dollars to buy a hundred dollars of Bitcoin, or hundred dollars of Ethereum. And there are margin exchanges. On margin exchanges, customers might deposit a hundred dollars to buy $500 of Bitcoin or to sell $200 of Bitcoin that they don't have, to borrow; customers might also deposit a hundred dollars to withdraw $50 of Bitcoin that they don't have, going negative in Bitcoin. FTX was predominantly a margin exchange. The vast majority of activity happened on margin on FTX. When you have a margin exchange, you know, you can think of it in some ways like a mortgage. You know, if you have a hundred-thousand-dollar house, you might take out a $10,000 mortgage against that. That would be the equivalent of, you know, having a deposit of some number of Bitcoins, withdrawing dollars against that. And the biggest risk for margin exchanges in general, and for FTX, is what happens if one of those is threatening to go bad; that is to say
MS. SASSOON: Objection, your Honor. Narrative
Q. Mr. Bankman-Fried, did you make any mistakes along the way?
A. Yes, I made a number of small mistakes and a number of larger mistakes. By far the biggest mistake was we did not have a dedicated risk management team, we didn't have a chief risk officer. We had a number of people who were involved to some extent in managing risk, but no one dedicated to it, and there were significant oversights.
Alameda’s first office

Q. Where was Alameda's first office?
A. The first office, it was in——it was a airbnb that we rented out in North Berkeley, California.
Q. Can you describe the layout of that airbnb.
A. Yeah. So it was listed as a two-bedroom airbnb. There were three of us, but it had an attic, so that seemed like three bedrooms to us. There was a living room which was a couch, so a fourth bedroom. And then the rest of the area here was the office. We packed that with desks and computers, and mostly boxes from Amazon. Eventually we had to start dealing with the cardboard box problem pretty soon. And after overflowing that apartment, after a few months, we got a more traditional office space in downtown Berkeley.
The Alameda split in 2018

SBF claims that after the split, teh fund made 50% to 100% annualised returns

Q. Okay. Coming back to Ms. Ellison, about when did she join the company?
A. She joined in——right around late February or early March of 2018.
Q. And after she joined, did anything happen?
A. Yeah. There was a split, a schism, in the company. There were sharp divides between two groups of the company, and ultimately one of them resigned and took most of the capital with it.

See this Tweet:


Q. What did you say to Ms. Ellison?
A. I——I said that I was——I apologized for not telling her earlier when problems had started bubbling up that I suspected that there might be bigger problems.

Q. Okay. Now after this schism and half of the company left, what happened to Alameda's performance?
A. It did——I felt like it did quite well after that. We had addressed the——the problems that had led to the schism. We had dozens of weeks of profit in a row. We were making between 50 and a hundred percent returns annualized.
Read 5 tweets
Oct 26, 2023
SBF Trial – 26 October 2023 - SBF Testimony (without jury)

Today SBF testified without the jury present. This appears to be a practice for the judge, to help judge Kaplan decide what the jury should and should not be allowed to hear. SBF will testify for real tomorrow, (unless he changes his mind overnight). The judge has not told the jury that this is going on.

THE COURT: There is something that has to happen at this point in the trial that will take a couple of hours, and that is not something that concerns you. In consequence, you've got the rest of the day off. We'll see you at 9:30 tomorrow morning.

THE COURT: Now just so that everyone who has taken the trouble to get here today understands what is going on and why, there are a number of areas of potential testimony from Mr. Bankman-Fried that the defense wishes to elicit. The government asserts that I shouldn't hear any of it, or, to be more precise, that the jury shouldn't hear any of it. And despite a great deal of effort on the part of everybody concerned, the amount of information that I have to date is, in my judgment, inadequate to resolve the admissibility of this testimony, in significant part because it's not sufficiently detailed or specific. I have the authority under the rules of evidence to conduct a hearing so that the defendant can put in the evidence for my ears alone, following which I'll be in a position to rule one way or another as to whether the evidence is admissible before the jury
CROSS EXAMINATION

Cross examination began with discussions about the auto-deletion of Signal messages and document retention policies

Q. Is it your recollection that the policy expressly authorized deleting company communications that did not fall within the regulated categories?
A. That is my memory, yes.
Q. Where is this written policy?
A. I'm not sure if my answer is admissible.
THE COURT: Don't worry about that. You worry about Blockchain explorers. I will worry about what's admissible.
A. When I was a member of the company, I remember interacting with the policy and discussing it. As part of this case I think we have been unable to serve the subpoenas we have requested asking for it.

Q. I think you said you mentioned in passing that you set this auto-delete feature on Signal. Did you ever discuss with a lawyer whether that was covered by this policy?
A. Yeah.
Q. With who?
A. With Dan Friedberg.
Q. When?
A. This was around the time that he was discussing the auto deletion and data-retention policy with us, which my memory was late 2021.
Q. So which is it? Did you just mention that you were putting on this setting or did you seek approval from Dan Friedberg?
A. I think -- I apologize. I may have misinterpreted. I interpreted your early question as what conversations I had contemporaneous with when I originally changed that setting, which my memory it was prior to the discussions around the auto-deletion policy. So there is no formal policy around it when I had initially changed the default settings on my Signal
app to one week, but we did have formal discussions about it in connection with the data-retention policy which happened some number of months later.
Q. Just to make sure I follow your testimony, you implemented this setting and later this policy was put into place?
A. I believe that is correct, yes.

Q. Is that the document retention policy you've been talking about?
A. No, this is not.
Q. And does it resemble in substance what was in the retention policy you've been talking about?
A. No, it does not.
Q. So the supposed policy you've been testifying about, you have no record of it sitting here today.
A. That's correct. We have requested it numerous times.
SBF mentions in late 2021 that “Trabucco was slowly drifting effectively towards retirement”

A. I think late 2021. I don't remember the exact time.
Q. And what was your involvement in Alameda at that point?
A. So this was after the CEO role had transitioned to Caroline Ellison and Sam Trabucco. It was during a period where it was, you know——Trabucco was slowly drifting effectively towards retirement, so it was primarily Caroline. I was involved in a few areas of Alameda. I was particularly involved in venture-related investments, and later on I became involved in
hedging decisions. I was not on a day-to-day level involved in other topics that I can recall——there——there may well be one or two I'm forgetting there——although I would get periodic updates from Caroline about it and she would sometimes elicit input from me.
Read 8 tweets
Oct 16, 2023
SBF Trial - Nishad Singh Testimony – 16 October 2023

Just as for the other FTX insiders, a quick admission of the crimes committed at the start

Q. What was your job at FTX?
A. I was the head of engineering.
Q. Did you commit financial crimes while at FTX?
A. I did.
Q. What crimes did you commit while working at the company?
A. I defrauded customers, investors, I participated in money laundering, and I violated campaign finance laws.
Q. Did you commit those crimes on your own or with others?
A. With others.
Q. Who?
A. Sam Bankman-Fried, Gary Wang, Caroline Ellison, Ryan Salame.
The $1 billion investment in Genesis Digital Assets. SBF, Ramnik, and Ryan Salame visited Kazakhstan to make the deal. SBF “called the shots” with the investment.

Q. Okay. So starting with the top of the sheet, do you see in column A2 and A3, Genesis Digital Assets?
A. Yes.
Q. And do you see the——in column E, what the category of that is?
A. Yes. Mining.
Q. So are you familiar with an investment in Genesis or a mining company?
A. Yeah. I don't——yes. I don't recognize the name Genesis Digital Assets, but I know that Sam, Ramnik, and Ryan Salame visited Kazakhstan sometime in late 2021 or early 2022 to look into making a deal with a mining firm there, and I heard later in 2022 from Ramnik that they had spent a billion dollars on it.

Q. What, if any, involvement did the defendant have in acquiring or investing in the mining company you heard about?
A. I think he was calling the shots there. He went to go visit them for multiple days. That's a pretty extreme sort of sacrifice in Sam's calendar.
$500m Anthropic Investment - SBF had “extreme” involvement in the deal

[This appears to have subsequently been a very good investment from a returns perspective]

Q. Let's take a look at row 4 here on the spreadsheet. Do you see a payment to a project name called Anthropic and the investment amount of $499,999,900?
A. Yes.
Q. Are you familiar with Anthropic?
A. Yes, I am.
Q. What is it?
A. It's an AI company focused on AI safety.
Q. Do you know what the almost $500 million to Anthropic was for?
A. I know what we were told it was for. It was compute.


Q. Did you have conversations with the defendant about a payment to Anthropic?
A. I did.

Q. What did the defendant say to you?
A. That we were going to invest $500 million in Anthropic.
Q. Okay. And what involvement, if any, did the defendant have in the Anthropic investment?
A. Extreme amount of involvement. I was in the Hong Kong office

Q. Based on your conversations and your observations, what, if any, involvement did the defendant have in the Anthropic investment?
A. He set it up and decided on it.
Q. What entity does the spreadsheet say was the investment entity for these Anthropic investments?
A. Alameda Research Ventures LLC
Read 16 tweets
Oct 16, 2023
[1/16] Bitcoin History: The Flash Crash to 1 cent in June 2011

In the summer of 2011, the Bitcoin price crashed down to just 1 cent.

Read the 🧵 below to find out more. Image
[2/16] In the aftermath of the GFC, the price of monetary alternatives like gold was strong. Gold enjoyed a tremendous rally, causing considerable excitement among traders Image
[3/16] The price of silver was also on 🔥 Image
Read 16 tweets

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