Social media activity from Caroline Ellison and Binance CEO Changpeng Zhao was front and center in the criminal trial of Sam Bankman-Fried on Oct. 12.
The former Alameda Research CEO placed part of the blame for FTX's failure on CZ, while the Binance CEO claimed Ellison's offer to buy the firm's FTT holdings was the cause.part of the blame for the collapse of FTX on CZ’s social media activity. In the now famous tweet on X from Nov. 6, 2022, CZthat Binance would be liquidating its holdings of FTX Token “due to recent revelations that have came to light”.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash . Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4The liquidation of the tokens, according to many reports, caused retail investors to follow Binance’s example and withdraw funds from FTX. The run on the platform led to FTX halting withdrawals and filing for bankruptcy on Nov. 11.
According to Ellison, although the tweet “contributed” to FTX’s collapse, the main reason was Alameda borrowing $10 billion from the exchange “it couldn’t repay”. She first took the stand in SBF’s trial on Oct. 10,back against claims one of his tweets"destroyed FTX" in a Dec. 6 thread, saying"no healthy business can be destroyed by a tweet". He pointed to Ellison's own social media activity from Nov.
On questioning from Cohen, Ellison testified that she “might have said that might not have known” about her concerns “putting FTX customers' funds at risk”. Assistant U.S. Attorney Danielle Sassoon called the claim “vague”.Ellison took the stand on the seventh day of SBF’s criminal trial, which began on Oct. 3. She was one of the first FTX and Alameda insiders to plead guilty as part of an agreement with U.S. authorities for her testimony.
Bankman-Fried has pleaded not guilty to seven criminal charges in his first trial, expected to run through November. He will face an additional five counts in a March 2024 trial.
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