Original article by Helene Braun and Elizabeth Napolitano, Coindesk

Original translation: Wang Eryu, PANews

  • FTX founder SBF went on trial this week over allegations that the collapsed crypto exchange stole billions of dollars.

  • Key witnesses include former colleagues and friends, especially Caroline Ellison and Gary Wang, who are closely associated with FTX and Alameda Research. Ellison, SBF’s former lover, was well aware of the inner workings of FTX and has admitted to misleading behavior.

  • Witnesses such as Nishad Singh and Wang once held senior positions at FTX and Alameda and have pleaded guilty to the relevant charges.

Nearly a year after the collapse of global crypto exchange FTX, its founder and former CEO Sam Bankman-Fried has been left in disgrace. This week, he’ll try to convince a jury of his peers to let him go free. But first, we’ll hear from some of his closest friends.

During the six-week trial, prosecutors will delve into testimony, internal documents, emails and a mountain of evidence to uncover how the crypto exchange allegedly stole billions of dollars in customer funds. The most compelling evidence may come from prosecutors’ witnesses: SBF’s former friend and ally.

Several of SBF’s former colleagues and friends will testify against the former crypto mogul after reaching a plea agreement with the U.S. Department of Justice, including his former lover Caroline Ellison and childhood friend Gary Wang, both of whom were deeply involved in the day-to-day operations of FTX and its quantitative trading fund Alameda Research. Two other people whose names have not yet been made public may testify in court after being granted immunity, indicating that they may also be related to the exchange. The U.S. Department of Justice also announced over the weekend that prosecutors plan to call former FTX customers and investors from around the world as witnesses during the trial.

witness

Caroline Ellison: Former Alameda CEO, pleaded guilty

Caroline Ellison is one of the most high-profile witnesses, and she is expected to stand on the opposite side of SBF. Court documents show that as the former head of Alameda Research, a crypto hedge fund associated with FTX, she will reveal the relationship between the two companies and the amount of FTT held by FTX. In addition, since she had a romantic relationship with the founder of FTX, she may also bring some vulgar gossip. She is said to be one of the few insiders who really understands the internal situation of FTX.

Ellison, whose parents are both economists at MIT, and SBF met at their previous employer, Jane Street, a Wall Street-focused trading firm. The two reunited in October 2021, and SBF convinced her to join his crypto company at a Bay Area cafe.

In December 2022, at a plea hearing shortly after the FTX collapse, Ellison admitted to intentionally misleading lenders and obtaining an "unlimited line of credit without posting collateral" through FTX for her then-hedge fund, Alameda Research, even though the company did not need the money at the time.

Ellison admitted to fraud charges and signed a plea agreement, clearing her of tax crimes. Her knowledge of the alleged sharing of customer funds between FTX and Alameda could become a key point in the trial.

She is also considered to be the person who knows SBF best on a personal level, given her former relationship with the former crypto tycoon, which ended in February 2022, according to her diary, which SBF leaked to the New York Times in August. (Related reading: FTX executives' latest insider exposure: SBF "maliciously" disclosed his ex-girlfriend's private diary and had planned to buy an island for "refuge")

She wrote in her journal primarily about her feelings toward SBF and how the multiple on-and-off relationships affected her work at Alameda Research, writing that she “felt too closely associated with [him] to be painful.”

Although she made no mention of any living arrangements in her diary, Ellison and other FTX employees are known to live with SBF in a $40 million penthouse in Albany, Bahamas.

That makes Ellison one of the few insiders who seems to have been around SBF both professionally and emotionally, giving her a unique perspective on both the former FTX founder’s ethics as a businessman and his personal character.

Nishad Singh: FTX Engineering Director, Pleads Guilty

Nishad Singh was another early Alameda Research employee when the trading firm was still headquartered in an apartment in Berkeley, California, with just four other employees. Singh, who was close to SBF’s brothers in high school, served as Alameda’s director of engineering and, like Ellison, lived with SBF in his 10-person luxury penthouse in the Bahamas. After a year and a half at Alameda, he took a small role as director of engineering at the newly formed FTX derivatives exchange.

Singh was reportedly one of three people who controlled the keys to FTX’s matching engine, a system that facilitates the exchange’s processing of buy and sell orders, allowing those holding the keys to move funds at will. He also had knowledge of FTX lending customer funds to Alameda. Like Ellison, he pleaded guilty in February to six criminal charges, including fraud and conspiracy.

Gary Wang: Co-founder of Alameda Research and FTX, pleads guilty

Gary Wang is the co-founder of Alameda Research and FTX, and the right-hand man of SBF. Gary Wang served as the CTO of both companies and is known as a key player in FTX.

Wang also knew SBF on a personal level, as they attended math camp together in high school and shared a roommateship at MIT. He was also one of SBF’s 10 roommates in the Nassau penthouse where he lived. The Commodities and Trading Commission (CFTC) said Wang “allowed Alameda to maintain a substantially unlimited line of credit at FTX.”

In December 2022, Wang and Ellison pleaded guilty to charges related to the FTX collapse.

Andria van der Merwe: Economist, Financial Market Regulation Survey

Andria van der Merwe's resume on the website of consulting firm Compass Lexecon shows that she is an economist who specializes in complex financial market regulatory investigations. As an expert in financial regulation and market risk, she is expected to provide insight into how SBF and its inner circle allegedly conspired to violate federal securities and commodities laws. She may also testify on the impact of the FTX collapse on the broader financial markets.

Peter Easton: Professor at the University of Notre Dame

Prosecutors say Notre Dame professor Peter Easton will outline the finances of Alameda Research and FTX, including Alameda's balance sheet issues that sparked the collapse of SBF's multibillion-dollar crypto empire. His testimony will discuss how customer funds are held and whether actual bank account balances match FTX's internal ledger balances.

Defense witness

Thomas Bishop: Corporate consultant specializing in forensic investigations and accounting issues

Tom Bishop is a corporate consultant who specializes in forensic investigations and accounting issues. Court documents don’t reveal much about his planned testimony, except that he may discuss the “calculations of financial numbers and metrics” for FTX and Alameda based on “publicly available documents and records, including, but not limited to, Alameda’s balance sheet.” Defense attorneys said they intend to call Bishop to rebut possible Justice Department testimony if needed.

Brian Kim: Data Analysis and Forensics Expert

Data analytics and forensics expert Brian Kim is likely to speak about internal messaging between SBF and employees of FTX and its sister companies. If called, he could testify about “content, metadata, and file paths associated with Slack data and Google Docs” that allegedly prove SBF directed employees to destroy evidence of the company’s alleged fraud. The data included “fields [for files and messages] listing the author, custodian(s), and viewer(s), as well as the dates on which the content was created, modified, viewed, saved, and/or deleted,” according to court documents. Like Bishop, Kim’s focus, if called, would be on refuting the Justice Department’s testimony.

Joseph Pimbley: Financial risk management expert

Financial consultant Joseph Pimbley is an expert in financial risk management. Court documents show he may testify and tell the jury that "FTX's software infrastructure ... lacked robustness in reporting mechanisms and insufficient testing and quality assurance of data integrity and code," which could not be seen or easily discovered by outside users like SBF. Defense lawyers said they plan to call him to rebut Wang and Singh's testimony.

Andrew Di Wu: Professor of Finance and Technology, University of Michigan

Andrew Di Wu, a professor of finance and technology at the University of Michigan, is likely to give the jury an overview of how cryptocurrency exchanges and the underlying blockchain technology work. He is also likely to testify about the "unique complexities of operating centralized cryptocurrency exchanges, particularly those operating across borders ... and the challenges of handling transactions in multiple fiat currencies and cryptocurrencies," according to court documents. The defense said Di Wu is likely to testify in response to testimony from an FBI agent for prosecutors.

Witnesses to be confirmed

As of September 29, a number of key executives and other individuals close to SBF have not been publicly named as possible witnesses, including several key figures at FTX.

Sam Trabucco: Former Co-CEO of Alameda Research

Before Caroline Ellison took over as sole CEO of Alameda Research, she shared the position with Sam Trabucco, who left the position in August 2022 after just one year. In 2021, he posted on X that he had driven Alameda's expansion beyond its initial business as a market maker for low-volume crypto assets and into riskier trading, leading the company to "huge" profits. Trabucco was not listed as one of the executives who knew about FTX transferring customer funds to Alameda in the Wall Street Journal article last year.

Dan Friedberg: Former Chief Compliance Officer of FTX

Daniel Friedberg served as FTX’s chief compliance officer from March 2020 to November 2022. He was previously associated with an online poker site that was embroiled in a scandal in which an estimated $20 million in funds were misappropriated, and he reportedly told an ally to pin the blame on an unnamed consultant at the company. He joined FTX after leading the cryptocurrency division at Fenwick West LLP and becoming a partner at the firm.

Last November, he reportedly provided details about FTX to federal prosecutors. Although his name has not been confirmed, he is "expected to be called as a government witness" in the SBF trial, Reuters reported. His lawyer did not answer calls seeking comment.

Ryan Salame: FTX Digital Markets Co-CEO, has pleaded guilty

Ryan Salame, co-CEO of FTX's Bahamas subsidiary FTX Digital Markets, became the fourth executive in SBF's inner circle to plead guilty to federal charges after accepting a plea agreement this fall.

Campaign finance records show that Salame, at the direction of SBF, provided millions of dollars in illegal campaign donations to dozens of U.S. congressmen. However, while Salame helped his former boss gain influence on Capitol Hill, he claimed that he knew nothing about the severity of FTX's financial difficulties or the crimes its executives were accused of. Related reading: (Another former FTX executive pleaded guilty to helping SBF secretly fund the Republican election, and may have up to $1.5 billion in assets confiscated)

Salame has reportedly turned over documents related to the FTX collapse to federal prosecutors, but he will not testify in court, according to The New York Times. An earlier court filing stated that if subpoenaed to testify, he would invoke his Fifth Amendment right not to incriminate himself.