#News#
Revealing SBF’s 250-page defense draft: I did what I thought was rightIn the draft, SBF traces his development from his childhood in Palo Alto to the penthouse he purchased in the Bahamas near FTX headquarters. But he denied misuse of funds, arguing that if Alameda had hedged, it would have remained solvent and avoided the entire unfortunate saga.
Source: David Yaffe-Bellany, The New York Times Translation: Joy, PANews
Sam Bankman-Fried, the founder of failed cryptocurrency exchange FTX, gave a blunt assessment of his predicament at the end of his never-published 15,000-word Twitter post. "I'm broke, wearing an ankle monitor, and one of the most hated people in the world," he wrote. "I will probably never be able to do anything to make a positive difference in my life again."
He added: "The truth is, I did what I thought was the right thing."
SBF was charged with fraud due to the collapse of FTX and was arrested in December 2022 and subsequently released on bail and placed under house arrest. He then wrote hundreds of pages of sometimes disjointed self-defense, covering everything from childhood memories to mathematical calculations.
In a draft of his unsent post, which he formatted as a series of tweets, some 70 typed pages, he criticized some of his closest colleagues and interspersed his arguments with photos from his high school days. and pictures of popcorn and a garden maze. Every few pages, key moments in the narrative are accompanied by links to music videos by Alicia Keys, Katy Perry or Rihanna.
SBF, 31, who has been a prolific poster on Twitter, labeled the post a "draft of ideas" and included links to 29 other relevant FTX files. One document, "Inception V2," is a lengthy attack on the company's bankruptcy lawyers and contains screenshots from the 2010 Christopher Nolan film. A separate link opens a spreadsheet listing SBF's Amazon orders from 2021.
The roughly 250 pages of documents, which have never been reported before, provide a window into the SBF's state of mind during his eight months in home detention after a judge revoked his bail in August. They also provide new details about his possible legal defense, beyond what his lawyers have revealed in court, revealing how he will justify his actions at his trial, which is scheduled for October 3. of.
Prosecutors accuse SBF of orchestrating a scheme to transfer FTX client funds to Alameda Research, a hedge fund he founded, so that his firm could make venture capital investments, buy real estate and donate to politicians. He had previously pleaded not guilty because he faced decades in prison if convicted.
While under house arrest, the SBF sent the documents to Tiffany Fong, a social media influencer who has a YouTube channel about the crypto industry. Fong shared these with The New York Times.
"He liked that I didn't work for anyone," she said. "He thought I could draw my own conclusions."
Representatives for SBF declined to comment.
In several documents, SBF accused his ex-girlfriend and one-time deputy Caroline Ellison of fueling FTX's collapse. He called her incompetent for the job he gave her as head of Alameda, claiming she cried during a meeting with him and refused to develop a trading strategy that would have protected his business from a market collapse.
“She continually avoided talking about risk management—avoiding my advice—until it was too late,” he wrote in a document titled “Alameda’s Hedging Failure.” "Every time I suggested it, it just made her feel worse. I'm sure being an ex didn't help."
In the Twitter draft, SBF also criticized Alameda co-CEO Sam Trabucco. Documents say Trabucco and Ellison didn't get along. While Trabucco had good instincts about risk management, by the end of 2021 he was "in the process of quietly exiting."
SBF writes that Trabucco prefers to "travel around the world on a boat while dating a ton of men." He then linked to Rihanna's music video for "Cheers (Drink to That)."
Ellison and two other SBF executives have pleaded guilty to fraud charges and agreed to testify against him. Separately, a fourth man pleaded guilty this month without promising to cooperate in court. Trabucco has not been accused of any wrongdoing.
Lawyers for Trabucco and Ellison declined to comment.
FTX, once hailed as a trusted force in the regulatory-starved cryptocurrency world, collapsed last November, costing users billions of dollars and delivering a devastating blow to the entire industry. After his arrest, SBF was released on bail and allowed to live with his parents, both longtime Stanford law professors, at their home in Palo Alto, California. They had a German shepherd named Sandor as his guard dog.
For several months, SBF has hosted guests such as the author Michael Lewis, who is completing a book about him, as well as several journalists.
Few people have as much access as KOL Fong, who developed an online rapport with SBF before FTX failed. Fong said she visited SBF at his parents' home more than a dozen times and recorded conversations with him, which she may eventually publish.
Fong said that while under house arrest, SBF spent most of his time in the study, where he played computer games, set up chess boards and sometimes slept on the sofa. Most days, she said, he was writing the legal defense, documenting his thoughts on the case in hundreds of pages of Google documents. SBF also told her that his family was installing a pickleball court for him in the yard.
The SBF handed the documents to Fong in late January this year. It's unclear what he wanted her to do with them. Fong, who suffered losses in the collapse of cryptocurrency firm Celsius Network, said she sympathized with FTX’s victims and was skeptical of many of SBF’s claims. She sent a document to former Alameda engineer Aditya Baradwaj, who gave a point-by-point rebuttal to Mr SBF, noting that Alameda's hedging would be "irrelevant" if FTX had not misused customer funds.
In a draft Twitter post, SBF traced the evolution of his business from his childhood in Palo Alto to the penthouse he purchased in the Bahamas near FTX headquarters. He recalled meeting Trabucco at math camp, when he and his future colleagues snuck out after curfew to bake cheesecake brownies, and he described his early admiration for Ellison, calling her "extremely smart." He also inserted some personal photos, including one showing him holding a T-shirt Trabucco bought him in high school.
[SBF]
In another segment, SBF posted a link to a document he wrote in 2019, "Tonight We Are Young," which he interacted with Binance founder CZ(aka CZ) at a conference in Taiwan reports. (He also added a link to Fun’s “We Are Young” music video.)
"Tonight was a night about alcohol, women, lasers and loud, pounding music, but there was a strange microclimate that seemed to stick with me," SBF wrote. "I walked by CZ a few more times, and each time he took his eyes off other things and hugged me: people think a lot about us."
Last November, CZ’s posts triggered a run on withdrawals that caused FTX to collapse. Binance representatives did not respond to requests for comment.
Some SBF documents detail the arguments his lawyers made in court. In documents titled “Inception V2,” “Inception V3” and “Inception Evidence,” SBF claims that Sullivan & Cromwell, the law firm that oversaw FTX’s bankruptcy, fabricated claims that he misappropriated user funds.
"They played very well," he wrote. "If it doesn't destroy everything I care about in life, I take my hat off to them."
A spokesman for law firm Sullivan & Cromwell declined to comment. Prosecutors argued that SBF's claims about the company amounted to "innuendo."
In several documents, SBF also dissected his history with Ellison, writing that their relationship ended "just like how most of my relationships end."
"They wanted more intimacy, commitment and publicity than I did," he wrote in the post, "and I felt claustrophobic."
In a separate filing, he said that despite his urging, Ellison refused to hedge Alameda's aggressive trading strategy. At one point, he recalled, he sent her a message that amounted to "the meanest thing I've ever said to her." (He said he no longer had a record of the message.)
"Had Alameda hedged, it would have remained solvent and avoided the entire unfortunate story," he wrote.
SBF wrote in a Twitter draft that his concerns about Alameda intensified in the spring of 2022 as he packed his bags for Washington. A group of employees, including Ellison, were frantically discussing a possible deficit in the company's accounts. SBF wrote that he was only half-involved, but he heard enough to realize that the focus of the conversation was an account labeled "fiat@" - which the regulator said FTX executives used to move client funds to other projects.
"I've heard the name before, but I never knew what it was," he wrote.
Ellison pleaded guilty and said she and SBF conspired to use client money to shore up Alameda's finances. He denies misuse of funds.
"In general, I don't lie," he wrote in a document titled "The Truth." "That's something I believe in quite a bit."
