In the ongoing trial of Sam Bankman-Fried, new evidence has come to light indicating his allegations against Binance for the leak of Alameda Research’s balance sheet to CoinDesk, a pivotal event in the downfall of FTX and his crypto empire.
During the trial, former Alameda CEO Caroline Ellison revealed that Bankman-Fried had crafted a memo dated November 6, 2022, outlining potential investors to approach for a rescue plan.
In the document, he explicitly accused Binance, the world’s largest cryptocurrency exchange, of conducting a public relations campaign against them.
The memo detailed how Binance had leaked the balance sheet, published blog posts about it, shared it with CoinDesk, and then made a high-profile announcement about selling $500 million worth of FTT in response to the leaked information. In the same communication, Binance had advised its customers to exercise caution with regard to FTX.
This sequence of events led to CoinDesk’s November 2 report, which cited Alameda’s balance sheet and triggered a cascade of disastrous events in the cryptocurrency industry, ultimately resulting in the collapse of FTX.
In the same document, Bankman-Fried had considered reaching out to Justin Sun, founder of TRON and advisor to the Huobi exchange, as a potential investor. However, he noted that Justin Sun had close ties to CZ, the founder of Binance.
The document also outlined various “to-dos,” one of which involved Bankman-Fried posting a confident tweet thread, a task he indeed accomplished.
Additionally, Bankman-Fried highlighted that, at that juncture, FTX was well-capitalized but not infinitely liquid. During court proceedings, Ellison clarified that this meant FTX had access to only one-third of the $12 billion in client assets on the exchange, equating to $4 billion available for processing withdrawals.
Sam Bankman-Fried currently faces seven charges of fraud in the ongoing trial, which began last week. He is set to stand trial separately in March 2024 on other charges, including bank fraud and foreign bribery conspiracy. Ellison is scheduled to undergo cross-examination by the defense on Thursday.