Sam Bankman-Fried considered selling FTX equity to Saudi crown prince, says Caroline Ellison

Testimony from the former Alameda Research CEO continued on the sixth day of Sam Bankman-Fried’s criminal trial, delving into potential investments prior to FTX’s bankruptcy.

Former Alameda Research CEO Caroline Ellison claimed in court that Sam “SBF” Bankman-Fried attempted to raise equity for FTX by considering an investment from Saudi Crown Prince Mohammed bin Salman, or MBS.

Addressing the court at SBF’s criminal trial on Oct. 11, Ellison reportedly said she had discussed ways of hedging Alameda investments with Bankman-Fried in 2022. According to the former Alameda CEO, Bankman-Fried said that MBS was a potential investor in the crypto exchange prior to its collapse in November.

The potential investment by MBS was one of the notes mentioned on one of Ellison’s online journals titled “Things Sam is Freaking Out About”, which prosecutors said in August they could present at trial. According to her testimony, the list included “raising funds from MBS” as well as turning regulators against crypto exchange Binance.

One more Caroline Ellison courtroom sketch.

This one featuring SBF himself! https://t.co/q3O6xqxEhl pic.twitter.com/cQJbj5V1H7

— Ariel Givner, Esq. (@GivnerAriel) October 11, 2023

With a net worth in the billions, MBS — both crown prince and prime minister of Saudi Arabia — has made investments into blockchain gaming through the nation’s sovereign wealth fund. However, he was also reportedly connected to the 2018 assassination of Washington Post journalist Jamal Khashoggi at the Saudi consulate in Istanbul.

An April report from news outlet Puck stated that Bankman-Fried met with MBS in Saudi Arabia roughly two weeks before FTX filed for bankruptcy. Though SBF was reportedly looking to raise $1 billion for FTX, Saudi investors had been willing to contribute roughly $250 million — the same amount a judge required for bail after the former CEO had been arrested in the United States.

Ellison will continue her testimony likely through Oct. 11 and into Oct. 12, when SBF’s lawyers will cross examine her. At the time of publication, she had admitted to fraud during her time as head of Alameda and largely placed the blame for misuse of customer funds on Bankman-Fried, including directing her to provide misleading financial information to Genesis lenders.

Prosecutors in Bankman-Fried’s criminal trial said they expected to rest their case on Oct. 26 or Oct. 27, after which time SBF’s lawyers will start calling witnesses. Bankman-Fried has pleaded not guilty to seven criminal counts related to fraud at FTX, as well as five charges he will face in a March 2024 trial.

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