Article by: Helene Braun, Elizabeth Napolitano, Coindesk

Translation by: Wang Eryu, PANews

• FTX founder SBF will stand trial this week, accused of embezzling billions of dollars from the collapsed cryptocurrency exchange.
• Key witnesses include former colleagues and friends, especially Caroline Ellison and Gary Wang, both closely associated with FTX and Alameda Research. SBF's former partner Ellison has a deep understanding of FTX's internal operations and has admitted to deceptive behavior.
• Witnesses such as Nishad Singh and Wang held key positions at FTX and Alameda and have pleaded guilty to related charges.

The global cryptocurrency exchange FTX has been in collapse for nearly a year, and its founder and former CEO Sam Bankman-Fried has been disgraced. This week, he will try to persuade a jury of his peers to set him free. But first, we will hear from some of his close friends.

During the six-week trial, prosecutors will delve into various testimonies, internal documents, emails, and mountains of evidence to reveal the traces of the cryptocurrency exchange's alleged embezzlement of billions of dollars in customer funds. The most notable evidence may come from the prosecutor's witnesses: SBF's former friends and allies.

Several of SBF's former colleagues and friends have reached plea agreements with the U.S. Department of Justice and will testify against the former cryptocurrency tycoon, including his former partner Caroline Ellison and childhood friend Gary Wang, both deeply involved in the daily operations of FTX and its quantitative trading fund Alameda Research. Two other individuals, whose names have not been disclosed, may also testify after being granted immunity, indicating their potential involvement with the exchange. The U.S. Department of Justice also announced last weekend that prosecutors plan to summon former FTX clients and investors from around the world as witnesses during the trial.

Witnesses

Caroline Ellison: Former Alameda CEO, pleaded guilty

Caroline Ellison is one of the most anticipated witnesses, expected to stand against SBF. Court documents show that as the former head of the cryptocurrency hedge fund Alameda Research associated with FTX, she will disclose the relationship between the two companies and the amount of FTT held by FTX. Additionally, due to her past romantic relationship with SBF, she may bring some salacious gossip. She is said to be one of the few insiders who truly understand the internal workings of FTX.

Both of Ellison's parents are economists at the Massachusetts Institute of Technology. She met SBF at their previous employer, the Wall Street trading firm Jane Street. The two reconnected in October 2021, when SBF convinced her to join his cryptocurrency company at a coffee shop in the Bay Area.

In December 2022, shortly after the collapse of FTX, Ellison admitted to intentionally misleading lenders and obtaining "unrestricted credit lines through FTX for her then-hedge fund Alameda Research without providing collateral," even though the company did not need the money at the time.

Ellison admitted to the fraud charges, signed a plea agreement, and has no tax-related criminal behavior. Her understanding of the alleged sharing of customer funds between FTX and Alameda may be a key point in the trial.

Given her past romantic relationship with the former cryptocurrency tycoon, she is also considered to be the person who knows SBF best on a personal level. According to her diary, the relationship ended in February 2022, and SBF leaked that diary to The New York Times in August. (Related reading: Latest insider exposure of FTX executives: SBF "maliciously" made public former girlfriend's private diary, once planned to buy an island for "refuge")

In her diary, she mainly wrote about her feelings towards SBF and how the on-and-off relationship affected her work at Alameda Research, stating, "Feeling too close to [him] is painful."

Although her diary did not mention any living arrangements, it is understood that Ellison and other FTX employees lived together with SBF in a $40 million penthouse in Albany, Bahamas.

This makes Ellison one of the few insiders who seemed to have been close to SBF both professionally and emotionally, giving her a unique perspective to discuss the former FTX founder's ethical conduct as a businessman and his personal character traits.

Nishad Singh: FTX Engineering Manager, pleaded guilty

Nishad Singh is another early employee of Alameda Research, when the trading company was still based in an apartment in Berkeley, California, with only four other employees. Singh had a close relationship with SBF since high school and served as the engineering director at Alameda. Like Ellison, he also lived with SBF in a luxurious penthouse in the Bahamas with 10 other roommates. After working at Alameda for a year and a half, he became the engineering manager for the newly established FTX derivatives exchange, where his responsibilities were minimal.

Reportedly, Singh was one of three people with access to the keys to the FTX matching engine. The FTX matching engine facilitates the exchange's processing of buy and sell orders, and those with the keys can freely transfer funds. He also had knowledge of FTX lending customer funds to Alameda. Like Ellison, he pleaded guilty in February of this year to six criminal charges, including fraud and conspiracy.

Gary Wang: Co-founder of Alameda Research and FTX, pleaded guilty

Gary Wang is a co-founder of Alameda Research and FTX and was SBF's right-hand man. Wang served as the chief technology officer for both companies and was considered a key participant at FTX.

Wang also had a deep understanding of SBF on a personal level. He was SBF's math camp partner in high school and was his roommate at the Massachusetts Institute of Technology. He was also one of the 10 roommates who lived with SBF in the top-floor apartment in Nassau. The Commodity Futures Trading Commission (CFTC) stated that Wang "allowed Alameda to maintain virtually unlimited credit lines at FTX."

In December 2022, Wang pleaded guilty to the related charges of FTX's collapse along with Ellison.

Andria van der Merwe: Financial Market Regulatory Investigative Economist

Andria van der Merwe's resume on the consulting firm Compass Lexecon's website shows that she is an economist specializing in complex financial market regulatory investigations. As an expert in financial regulation and market risk, she is expected to provide insights into how SBF and his inner circle may have conspired to violate federal securities and commodities laws. She may also testify on the impact of FTX's collapse on the broader financial markets.

Peter Easton: Professor at the University of Notre Dame

Prosecutors stated that University of Notre Dame professor Peter Easton will outline the financial condition of Alameda Research and FTX, including the balance sheet issues at Alameda that led to the collapse of SBF's cryptocurrency empire worth billions of dollars. His testimony will discuss how customer funds were held and whether the actual bank account balances match the internal ledger balances at FTX.

Defense Witnesses

Thomas Bishop: Corporate Consultant, Specializes in Forensic Investigations and Accounting Issues

Tom Bishop is a corporate consultant specializing in forensic investigations and accounting issues. The court documents did not disclose much about his planned testimony, only revealing that he may discuss the "financial figures and metrics calculation of FTX and Alameda" based on "publicly available documents and records, including but not limited to Alameda's balance sheet." The defense lawyers stated that they intend to subpoena Bishop to counter potential testimony from the Department of Justice if necessary.

Brian Kim: Data Analysis and Forensics Expert

Data analysis and forensics expert Brian Kim may discuss internal communications among employees of SBF, FTX, and its sister companies. If called to testify, he may provide evidence related to "Slack data and Google documents content, metadata, and file paths," which are said to prove that SBF instructed employees to destroy evidence of alleged fraud. Court documents indicate that this data includes "fields listing authors, custodians, and viewers of [documents and messages], as well as dates of content creation, modification, viewing, saving, and/or deletion." Like Bishop, if called to testify, Kim's focus will also be to counter the Department of Justice's testimony.

Joseph Pimbley: Financial Risk Management Expert

Financial advisor Joseph Pimbley is an expert in financial risk management. Court documents indicate that he may tell the jury during his testimony about the "lack of robustness in FTX's software infrastructure… and the lack of testing and quality assurance for data integrity and code," which external users like SBF could not see or easily discover. The defense lawyers stated their intention to subpoena him to counter the testimony of Wang and Singh.

Andrew Di Wu: Professor of Finance and Technology at the University of Michigan

Andrew Di Wu, a professor of finance and technology at the University of Michigan, may provide an overview to the jury of how cryptocurrency exchanges and the underlying blockchain technology operate. Court documents indicate that he may also explain to the court "the unique complexities of operating a centralized cryptocurrency exchange, especially those involving cross-border operations… and the challenges of handling transactions involving multiple fiat and cryptocurrency currencies." The defense stated that Di Wu may testify in response to testimony provided by an FBI agent for the prosecution.

Pending Witnesses

As of September 29th, some key executives and other individuals closely related to SBF have not been publicly listed as potential witnesses, including several key figures at FTX.

Sam Trabucco: Former Co-CEO of Alameda Research

Before Caroline Ellison took over as the sole CEO of Alameda Research, she served as co-CEO with Sam Trabucco, who resigned in August 2022 after only a year in the position. In 2021, he posted on X that he had driven the expansion of Alameda beyond its initial business of market-making for low-volume cryptocurrencies, leading the company to "huge" profits in riskier trading areas. In an article in The Wall Street Journal last year, Trabucco was not listed as one of the executives knowledgeable about FTX transferring customer funds to Alameda.

Dan Friedberg: Former Chief Compliance Officer of FTX

Daniel Friedberg served as the Chief Compliance Officer of FTX from March 2020 to November 2022. He was previously associated with an online poker site involved in a scandal where an estimated $20 million was misappropriated, reportedly telling an associate to blame an unnamed advisor at the company. He led the cryptocurrency department at Fenwick & West LLP and joined FTX after becoming a partner at the firm.

Last November, he provided details about FTX to federal prosecutors. Reuters reported that although his name was not confirmed, he is "expected to be subpoenaed as a government witness" in SBF's trial. His lawyer did not respond to requests for comment from reporters.

Ryan Salame: Co-CEO of FTX Digital Markets, Pleaded Guilty

Ryan Salame is the co-CEO of FTX Digital Markets, a subsidiary of FTX in the Bahamas. After accepting a plea agreement this fall, he became the fourth executive in SBF's inner circle to plead guilty to federal charges.

Campaign finance records show that Salame, at SBF's direction, provided millions of dollars in illegal campaign contributions to dozens of U.S. congress members. However, while Salame helped his former boss gain influence on Capitol Hill, he claimed to have no knowledge of the severity of FTX's financial troubles or the alleged crimes of its executives. (Related reading: Another former FTX executive pleads guilty, secretly funded Republican elections for SBF, with the highest possible confiscation of $1.5 billion in assets)

Reportedly, Salame has submitted documents related to FTX's collapse to federal prosecutors, but according to The New York Times, he will not testify in court. A previous court document stated that if called to testify, he will invoke his Fifth Amendment right against self-incrimination.

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