Disgraced FTX founder Sam Bankman-Fried wrote a 250-page, unpublished memo blaming his former friend and lieutenant Caroline Ellison for the cryptocurrency’s collapse – and used music videos from Katy Perry and Rihanna to take credit defend.
Bankman-Fried described himself as “one of the most hated people in the world” in hundreds of pages he wrote while under house arrest in the form of a 15,000-word Twitter thread. He has since had his $250 million bail revoked and is awaiting trial at the notorious Metropolitan Detention Center in Brooklyn.
The 31-year-old faces more than 100 years in prison on a series of charges related to the collapse of his cryptocurrency exchange in November 2022 after he allegedly used customer funds transferred from Alameda for luxury purchases and political donations.
He never published the pages detailing what led to FTX’s collapse, but he shared them with crypto influencer Tiffany Fong, who gave them to the New York Times. The pages had various titles inspired by films like “Inception” and linked to various music videos from Katy Perry, Alicia Keys and others.
In repeated mentions, Bankman-Fried blamed Ellison, the CEO of his investment company Alameda Research, for TMX’s implosion, claiming she was ill-equipped for the role assigned to her and refused to implement his trading strategies that prevented the collapse.
Disgraced FTX founder Sam Bankman-Fried wrote a 250-page, unpublished memo blaming his former friend and lieutenant Caroline Ellison for the cryptocurrency’s collapse
Bankman-Fried claimed that Ellison, the CEO of his investment company Alameda Research, was ill-equipped for the role he had assigned her and that she refused to implement his trading strategies
In the memo, he shared his perspective on his story from childhood to the collapse of TMX and shared a handful of personal images, including an undated picture from high school
He wrote: “She constantly avoided talking about risk management – dodging my suggestions – until it was too late… Every time I made suggestions to her, it only made her feel worse.” I’m sure that being an ex-girlfriend didn’t help.’
Bankman-Fried and Ellison had a romantic relationship that “ended the way most of my relationships end,” he claimed: “They want more intimacy, commitment and public visibility than I do, and I feel claustrophobic.”
To demonstrate what his defense strategy might look like, Bankman-Fried argued that Alameda would have remained solvent if Ellison had agreed to hedge its aggressive trading strategy, as he claimed he had suggested.
“If Alameda had hedged, it would have remained solvent and would have prevented the whole unfortunate story,” he wrote.
Ellison, 28, told a New York court last year that she ran Alameda Research and had access to essentially an “unlimited” amount of FTX customer funds.
She pleaded guilty to fraud charges and admitted agreeing with Bankman-Fried to make “materially misleading financial statements” to conceal the arrangement – which she knew was illegal.
Bankman-Fried and Ellison had a romantic relationship that “ended the way most of my relationships end,” he claimed
The alleged fraudster pleaded not guilty to stealing billions of dollars in FTX customer funds to cover losses at Alameda Research, his cryptocurrency-focused hedge fund
The pages had various titles inspired by films like “Inception” and linked to various music videos. A document with a link to Rihanna’s music video for Cheers (Drink to that)
In his memo, Bankman-Fried claims that this is not true and that he only learned in the spring of 2022 of an account labeled “fiat@” that regulators say was used to divert customer funds.
“I had heard that name before, but I never knew exactly what it was,” he claimed.
In another post, he wrote: “Generally speaking, I don’t lie…it’s something I believe in pretty strongly.”
In the memo, he shared his perspective on his story from childhood to TMX’s collapse and shared a handful of personal pictures, including one from high school.
Bankman-Fried also claimed that Alameda’s co-boss Sam Trabucco “softly quit” as the collapse became apparent and spent his time “going on dates with a bunch of guys while sailing around the world on a boat.” .
He linked to Rihanna’s music video for the song “Cheers (Drink to That)” while talking about Trabucco, who has not been accused of any crimes.
Bankman-Fried wrote the pages while under house arrest at his parents’ home in Palo Alto, California, where he entertained guests and spent much of his time making plans for his defense.
His $250 million bail, the most expensive in U.S. history, severely limited his internet and phone use.
Bankman-Fried also claimed that Alameda’s co-boss Sam Trabucco spent his time “going on dates with a bunch of guys while sailing around the world on a boat.”
U.S. District Judge Lewis Kaplan revoked Bankman-Fried’s bail after finding that the former billionaire likely tampered with witnesses at least twice.
The alleged fraudster has pleaded not guilty to stealing billions of dollars in FTX customer funds to cover losses at Alameda Research, his cryptocurrency-focused hedge fund, and has filed seven criminal charges alleging he used money stolen from FTX customers has to earn more than $100 million in political campaign contributions before the 2022 midterm elections.
Former FTX executive Ryan Salame, Nishad Singh, Ellison and Gary Wang have all pleaded guilty to fraud charges and agreed to cooperate against them
Bankman Fried.
Prosecutors accuse Bankman-Fried of misusing FTX customer funds for personal expenses, high-risk bets through affiliated hedge fund Alameda Research and political donations to influence crypto regulation.
Last week he lost an appeal seeking release from prison after complaining that he was unable to properly prepare for his trial behind bars.
Bankman-Fried’s lawyers had claimed he was fed a “meat diet” and forced to make do with bread, water and peanut butter.
His legal team also complained that the crypto expert, who appeared in federal court in Manhattan, was unable to prepare without his proper medication.
Bankman-Fried’s lawyers argued that he needed access to computers and medication to properly prepare.
He was previously granted access to Adderall after his lawyers told the court he would take 10 mg tablets three to four times a day for his ADHD.
Bankham-Fried was also granted “uninterrupted access” to his Emsam prescription for depression by Kaplan on August 14.