Sam Bankman-Fried Alleges Binance Leaked Alameda's Balance Sheet – Coinpedia Fintech News
In a grueling nine-hour testimony, Alameda’s CEO, Caroline Ellison, unveiled the case’s critical facts. She disclosed shocking details, including SBF’s attempted manipulation of Bitcoin prices and Binance’s suspected involvement in a data leak. All eyes are now on the revelation that Binance, a rival of FTX, may have leaked Alameda Research’s balance sheet to CoinDesk. This event played a decisive role in the downfall of FTX and SBF’s crypto empire, marking a turning point in the crypto industry.
The Memo that Shook FTX
Ellison’s testimony shed light on a pivotal memo dated November 6, 2022, where SBF outlined plans to approach potential investors for financial support. This internal document laid bare SBF’s concerns about Binance’s alleged smear campaign, accusing them of leaking sensitive financial data. According to SBF, Binance disseminated the balance sheet through blogs and provided it to CoinDesk. This singular event triggered a cataclysmic chain reaction, leading to FTX’s dramatic collapse.
In a strange twist, DCG, the parent company of CoinDesk, owned various crypto assets and businesses, including CoinDesk. However, due to the crypto market’s downturn, DCG had to sell some of these assets, including CoinDesk.
Behind the Scenes: SBF’s Strategic Moves
Within the same document, SBF identified Justin Sun, TRON’s founder and Huobi exchange advisor, as a potential investor. However, he noted Sun’s close ties to Changpeng Zhao (CZ), Binance’s head. Additionally, the document outlined various strategic steps SBF planned to take, including a confidential tweet to play around with public sentiments.
It’s well-documented that Binance nearly sealed a deal to acquire FTX. However, this potential acquisition catalyzed a series of events leading to FTX’s downfall. Binance’s decision to sell a significant amount of FTX’s native token, FTT, precipitated a market confidence crisis. Moreover, they later withdrew from the acquisition of the now-bankrupt FTX. This sequence of events paints a complex picture of the relationship between the two exchanges, adding layers to the ongoing trial’s context.
FTX’s Financial Quandary
The memo also offered insights into FTX’s financial status at that time. While the exchange boasted substantial capitalization, it fell short of infinite liquidity. Out of the $12 billion in client assets held on the exchange, only approximately $4 billion was readily available for processing withdrawals, underscoring the intricacies of FTX’s financial structure.
SBF faces a barrage of fraud charges, with a separate trial slated for March 2024, involving allegations of bank fraud and foreign bribery conspiracy. As Caroline Ellison prepares for cross-examination by the defense, further layers of complexity in this high-stakes trial are set to be revealed.
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