Nishad Sing, a senior executive at the
FTX sent a message to two colleagues in a group chat. He wrote that customers were in a hurry to withdraw money from the exchange. In the last 24 hours, customers had attempted to withdraw $1.25 billion from the exchange platform. $120 million of withdrawal requests were received in the last hour.
Caroline Ellison, the head of FTX’s sister hedge fund Alameda Research responded with a picture of a sad-faced woman.
Sam Bankman Fried
, FTX’s founder, replied with a simple word: "Oof."
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Bankman-Fried is now on trial for stealing more than $8 billion in FTX customer funds. Singh and Ellison both 28, have admitted to fraud in court and testified against their former friend. The company has gone bankrupt. During the trial, prosecutors used this testimony to give an unvarnished view of FTX’s rapid unraveling - a frantic November week that culminated in one the largest corporate failures in recent memory. The government has spent dozens of grueling hours assembling the most complete picture of FTX’s last days. It used witness testimony, texts, and other communications. To help jurors keep track of the rapid-fire sequence of events, prosecutors even posted a November calendar. The trial has revealed the high-stakes discussions that took place in secret in Bankman-Fried headquarters in Bahamas. The emotional impact of witness accounts of these behind-the scenes discussions has been felt in some of the most memorable moments of the trial. Ellison fought tears in her testimony as she described FTX's failure as "the worst week of [her] life." Singh said he was in such "severe mental distress" that he felt suicidal as "a crazy game of blame" raged all around him.
Gary Wang, a top FTX executive who has also testified in the case, pleaded to guilty along with Ellison, Singh and other top FTX executives. Bankman-Fried pleaded not guilt to seven counts of conspiracy and fraud, and could face a life term if convicted. Mark Botnick, a spokesperson for Bankman-Fried's legal team, declined to comment. FTX spiraled out of control the first weekend of November, when Changpeng Zhao announced he would be selling a large amount of a digital coin created by Bankman-Fried, which acted as a proxy for FTX. Zhao cited a CoinDesk article that revealed Alameda had financial problems. His promise to sell FTX’s own currency, FTT was a sign the exchange was in serious trouble. Ellison was in Japan on vacation when the crisis started. She said that she was concerned immediately. Alameda borrowed billions from FTX clients to fund extravagant spending for years. This left a huge hole in the accounts of the exchange.
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Top executives discussed how to react to Zhao, an old rival. The leaders of the firm considered sending a tweet accusing Zhao for spreading unfounded rumors or, in crypto-speak, "fear uncertainty and doubt". Ellison testified that an initial draft by Bankman Fried -- "Heh, I see someone really trying to FUD [us] this month" -- was too clearly ghostwritten.
She then published in her own words a tweet defending Alameda. She followed this up by pledging to buy back the FTT from Zhao. This post was not enough to calm the growing panic. In a group message that prosecutors showed the jury, Singh informed Ellison and Bankman Fried about the increasing withdrawals on the morning of November 6. He warned that "ftx processing isn't fast enough, even if they had the funds." Singh knocked at Wang's door that night in their penthouse, which they shared on the island of New Providence, Bahamas. Wang testified that they discussed withdrawals from FTX. Wang testified that he performed a few calculation and was pleasantly surprised when he found out that FTX has enough money to pay its customers. When he told Bankman-Fried the good news, he recalled that the FTX founder prompted him to examine the situation more closely by asking: "Are you also including our Korean friend?" Bankman-Fried was referring to a mysteriously labelled account on FTX, where he transferred the debt Alameda owed customers. Wang testified that the account indicated $8 billion had been missing. Bankman-Fried announced on the morning of November 8 that Binance would take over FTX. Christian Drappi was a software developer at Alameda in Hong Kong when he heard about the rescue plan from a colleague who uttered an expletive. Drappi, a prosecution witness, said: "I was shocked." Binance's deal collapsed the following day. In a digital war room called "small group chat," more than a dozen FTX officials, including Singh, Wang and Bankman Fried's father Joe Bankman, exchanged frantic text messages in a Signal thread. Bankman-Fried began to search for alternative sources of funding as the withdrawals grew. In a Google document, which prosecutors presented in court, Bankman-Fried compiled a long list of potential investors, including Dustin Moskovitz (co-founder of Facebook), Jane Street, a high-frequency trading company, and Saudi Arabia's Public Investment Fund. It was too late. Can Sun, one of FTX’s in-house attorneys, looked at a spreadsheet that showed the exchange wouldn’t be able to meet withdrawal requests. Sun remembered asking Bankman Fried and Singh on the witness stand to explain certain elements of the spreadsheet. Sun remembered Singh's pale face and how he looked like his soul was taken away. Sun said that "no one was responding." Sun and Bankman-Fried went for a walk at the Albany that evening. Bankman-Fried asked Alameda if it could provide any legal justifications to borrow FTX customers' funds. Sun went through some theoretical options but none were "supported by facts", he said. Sun testified that Sam basically said, "Got it." "He was not surprised at all." Ellison called a meeting of Alameda employees in Hong Kong a couple of nights after she returned from vacation. According to Drappi, she gathered 15 Alameda staffers in a round. She laughed nervously while explaining how FTX collapsed. She said that since FTX's founding, Alameda has used the customer deposits of the exchange to fund all sorts of expenditures. These remarks were recorded on audio that was played by prosecutors in court. Ellison replied, "Umm." "Sam," Ellison replied.
When FTX filed for
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On 11 November, most of Bankman Fried's friends had deserted him. Singh flew back to his family, who lived in the San Francisco Bay Area. Ellison had retreated into a family house in the Northeastern United States where she and her boyfriend were staying when the FBI arrived with a warrant mid-November.
Wang was the final member of Bankman Fried's inner circle who left the Bahamas on November 16, flying back to the United States. Wang told reporters that the next day he had a meeting with prosecutors.