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Thanks for the summary.  One nitpick:

During this section especially I kinda wanted to shout at my podcast when Will asked rhetorically "was he lying to me that whole time?" the answer is yes Will, it seems like they were. The code snippets from Nishad Singh and Gary Wang that the prosecution shared are pretty damning, for example.

To be fair to Will, he does acknowledge that Nishad's insurance fund code "seems like really quite clear fraud", if comparatively minor.

As for the other code snippets in your link -- the "backdoor" -- Nishad and Gary said the intention was to support Alameda's role as a backstop liquidity provider (which FTX was heavily dependent on in its early days to function):

  • “[Wang] testified about several changes Bankman-Fried asked him to make to FTX's software code to allow Alameda to withdraw unlimited funds from the exchange. . . . Wang agreed that the changes were necessary for Alameda to provide liquidity on the exchange” (Reuters)
  • "Singh also acknowledged that he originally thought some of the special treatment Bankman-Fried’s trading firm Alameda Research received on FTX was meant to protect customers by allowing it to more effectively ‘backstop’ some trades. ‘My view at the time [was that] it would be helpful for customers,’ Singh said" (Financial Times)

Thanks for going to the trouble of sourcing these quotes.

To me, the focus on "What this is referring to" is illuminating because it shows how SBF is laser-focused on what the prosecution has on him. What's strikingly absent is a desire to try hard at remembering so he can tell as much of the truth as possible.

I mean, in the "practice" cross-examination, I think he was frequently rebuked for guessing at what the prosecutor meant or sharing information beyond a short, binary, direct answer to the question the prosecutor (thought she) was asking.  For example, "A. And by "go negative," you're talking about negative in a particular coin or negative net asset value?  Q. Just have a negative balance, Mr. Bankman-Fried.  A. Sorry. I— ... THE COURT: ... I've gotten beyond my tether here. ... part of the problem is that the witness has what I'll simply call an interesting way of responding to questions for the moment.  Q. Mr. Bankman-Fried, in May of 2022, were you aware that account ID 9 @AlamedaResearch.com could have an overall negative value?  A. I am giving you my best guess at answering the question.  Q. I'm not asking for a guess. I'm asking what you understood at the time.  A. I am going to answer what I think the question you are asking is, but I apologize if I'm answering the wrong question."  I think the precise question she intends to ask here is extremely important, but she won't specify (or doesn't understand that she needs to.)  It's a very complicated case and the details matter.  If Alameda's trading accounts collectively had a net liability of billions to FTX for an extended period with no uncorrelated collateral, then they "borrowed" billions here in the way ~everyone thinks they did.  But if one subaccount was temporarily negative $3 billion in a particular coin while another subaccount was temporarily positive $4 billion in another coin and it's mostly for market-making purposes, then the sense in which Alameda was "borrowing" $3 billion via its customer accounts is extremely different.

And then there are plenty of reports of how when SBF gave extra information that wasn't asked for, that was surely "evading questions, trying to pour forth verbiage to distract Sassoon from what she’d asked." (from here)

Perhaps we're understanding the term "referring" differently -- I hear it as "I don't understand exactly what you're asking me (and if I guess wrong you might make me look like a liar)" while you might be hearing it as "I don't know which of the many pieces of supporting evidence have prompted you to ask this question and I don't want to reveal more than you already know about."

Taking the first example of "referring to" in your comment, we have:

Q. In fact, over and over again in public forums you described FTX platform as safe, correct?

A. I am not sure specifically what that is referring to. I may have.

I'm picturing his thought process as something like, "I think I used the word 'safe' multiple times in public forums in reference to FTX U.S.  If that is what she's referring to then my answer is 'Probably.'  But maybe she's referring to that tweet someone else wrote using the FTX Twitter account that said FTX International was safer than Binance.  And I can't think of any times I've actually described FTX International with the word 'safe' and I don't think I would have said that, so what do I say?  If I say 'Yes' then I'm giving the impression that I said something bad that I don't think I said, but if I say 'No' then she might bring up that tweet and make me look like a liar."

I think that's how my mind would respond anyway, given the way other interactions had gone.  For example, "Q. Now do you remember telling Zeke Faux in early 2022 that Alameda played by the same rules as other traders?  A. Not in that wording, no.  Q. So you don't recall that.  A. No.  Q. Do you recall telling him that in other wording?  A. I recall saying that Alameda wasn't front running other customers, that its trading access was like other customers."  If SBF had given a straight "no" -- because he did not in fact make the claim that the prosecutor is heavily implying he did -- and then the prosecutor had shown the jury a quote from Faux paraphrasing SBF that was taken out of context, would that have been perjury?  I would definitely have been wary of giving yes/no answers to imprecise or misleading questions.

It would also include saying confidently "no" if you're sure you never said something.

Who is ever sure they never said something?  I'm not sure why you and I disagree here.  I feel like the "normal" way to answer questions about things you may or may not have said a year or so ago is to say "yes" when you're >50% sure you said it and "no" otherwise.  Or, perhaps when testifying in your own defense, to just say "yes" every time you get the sense the prosecutor is about to pull out some written record of you saying it, even when that's technically lying because you don't actually remember, because it's not worth the risk.  But I think literal-minded people will feel very uncomfortable having only those two options and would rather say "I don't recall", especially if in squeezing their 25% confidence into a "no" only to get proven otherwise would constitute perjury.

I don't know which of the lines above are the 2+ suspicious ones, but none of them strike me as such.

whether the memo's use of that quotation was fair in that summary depends on all of Ellison's testimony at trial

And I think it was not fair because as far as I can tell, that quotation was the strongest piece of evidence the prosecution had that SBF directed Ellison to use customer funds in an improper way.

I think all that justifies a strong starting point that everyone else got it right, and it would take a lot of convincing analysis of ~ all of the prosecution's evidence to move the needle on that. 

I agree.  I don't expect anyone to take my word for it on the basis of a couple of anonymous comments.  But I'm trying to make a start on this forum because I am someone who is "inclined to spend days reading over the transcripts" and much else besides and given the conclusions I've come to, I'm not sure what else to do.

Thank you -- I misread you, I apologize, I thought you'd said the judge offered a trial delay.  (Although it's still somewhat interesting that Judge Kaplan reminded the defense that they could submit a request for a delay and he would consider it.)

Clearly the Court did not find this persuasive, but I still want to share some sense of the difficulties SBF was facing: at "the latest opportunity the defense had to observe whether the plan for access to the internet-enabled laptop would work as promised," due to a number of factors, SBF "spent an entire day getting access to a single document. That is one day he could not spend working at the MDC or conferring with his lawyers." (from here).  Perhaps Brady only requires that access is given to SBF's lawyers (who were not all "well-bankrolled" by the way -- Mills at least worked pro bono), but I still think these kind of things are worth mentioning in discussions of the extent to which SBF's testimony was evasiveness vs. genuinely not recalling.

Also, even if "the recently produced documents" were mostly "from the defendant's own Google accounts," he had at least 2.5 million pages in his Google accounts, so whether they were technically "accessible" is not really the point.  (Assuming he did have access -- SBF reported that FTX cut off his access to his personal LinkedIn account, for example.)

But I do think I veered into talking about how FTX would only provide data to the prosecution not the defense, when my original comment that started this thread was just the words "discovery material", which may have confused things.

I see no reason to believe he was incapable of factoring those things in to the extent relevant, or unwilling to do so

I think Judge Kaplan's apparent dislike of SBF has been widely reported and I assume we'll have to agree to disagree on whether that biased any of his judgments in this case.

If you think SBF didn't know that AR was "borrowing" client monies until after all such borrowing was done, we're going to have to agree to disagree on that.

No, I was suggesting that I agree with "the three key witnesses for the prosecution that no one understood what had happened with the $8B in fiat deposits until it had already happened" -- I wasn't talking about all borrowing.

I don't see how the terms of service are even relevant to claims about fraud against investors/lenders. That's ~$3B on those counts alone.

Maybe, but people have a tendency to lump these different figures together (as it looks like you just did wrt AR's borrowing) and I don't think that's helpful when trying to figure out what exactly FTX did wrong.  Why shouldn't we look at them one by one?

Besides, surely the weaker the case for fraud against customers, the more honest FTX's self-representation would appear to be, and so the weaker the case for fraud against investors/lenders?

I know this is a digression from the main question of intent but I'm still curious about it:  Do we know how much money was actually in the margin lending program?  How much of the fiat deposits were available for margin lending?  Prosecutors said "from June to November 2022, Alameda had taken between 8 and 12 billion, when there was at most 4 billion in the margin lending program" while the defense said "80 percent of the assets on FTX were margined assets used in futures trading. 80 percent are in this margin trading where customers are always borrowing other customers' assets."

Jason's comment and my response here are relevant.

It sounds like whether AR borrowing fiat deposits was criminal depends on whether the terms of service prohibited it, allowed it, or failed to comment on the matter.

But am I right in thinking that this is all moot with respect to the question of fraud if you believe the three key witnesses for the prosecution that no one understood what had happened with the $8B in fiat deposits until it had already happened?

Interestingly, a UK lawyer was prevented from testifying for the defense because interpretation of the law -- even foreign law -- is the presiding judge's domain.  ("The terms and any dispute shall be governed by, and construed in accordance with, English law.")  The lawyer had been planning to argue that, "FTX therefore owed no obligations as trustee of any fiat currency, and its obligations were only those contractual obligations in the Terms. On the English law interpretation of the Terms, FTX was obliged to honour customer withdrawals (i.e. to repay the debt of fiat currency that it owed), but was not constrained to use fiat currency for any particular purpose in the interim." (see here.)

I want to quickly address a couple of points of disagreement I have with Jason's take.  (Please don't take this to mean that I accept the rest -- there's a lot I disagree with -- I just don't have time to respond to it all right now.)

For instance, at one point SBF directed Ellison “to use FTX customer funds to repay loans" (her words)

This is misleading.  The complete line from Ellison is, "I understood that he was telling me to use FTX customer funds to repay our loans," then she proceeds to explain how she inferred this.

At no point in the trial does she say that he explicitly instructed her to touch customer fiat deposits.

About $4.5B more in customer funds was used to pay Alameda's lenders as a result

The defense doesn't seem to think so. "Caroline testified to you that what happened was, Alameda ‘would have to take the money from our line of credit to pay the lenders.’ And that's at transcript page 763. And I asked her, Well, if that's true, if the lenders were being repaid off the line of credit, wouldn't the amount of the line of credit go up? She said, Yes, it would. And I said, How much did it go up by? Oh, 5 to 10 billion. But when you look at the actual data that was pulled by Dr. Pimbley——and that's Defendant's Exhibit 617——you see that in fact the line of credit did not go up during the period when the loans were being repaid. In fact, it went down for much of the period."

I don't understand how it can simultaneously be true that 1) AR's balance was easily visible, 2) AR's balance was very negative, and 3) people believed AR's balance to be positive. Do you understand this?

I mean...I just think 2) is probably false.  Nishad messed up in his testimony and some information that undermined the prosecutors' story slipped through.  He also refers to FTX credit lines as nonwithdrawable, "Q. I'm going to ask you some more questions about line of credit in a bit, but just at a high level, what is a line of credit? A. It's a nonwithdrawable dollar amount that's granted to allow for easier trading without actually having to deposit as much money."  How is a credit line supposed to help them steal funds if the funds can't be withdrawn from the exchange?

Now if we assume Gary wasn't lying when he read out that AR's main account on FTX was negative $2.7B in June 2022, I guess it's still possible that when the prosecutor asked the question, they were pointing at the sub-account that was also helpfully named "info@alamedaresearch", or at the main account's balance in a particular coin.  (It may not have even been deliberate on the government's part -- there's a point when one of the prosectors seems to not understand that there's a difference between AR's net position on FTX and AR's balances in different coins.)

"my impression is that these valuations were not done rigorously" – let me know if you think that's still incorrect

That seems fine to say.  I think we just don't know either way, as the team handling the bankruptcy doesn't appear to have given anyone access to the original versions, so we just have SBF's (and Gary's?) memory of the rough figures and John Ray's protestations that SBF is deluded.

Customers deposited fiat into North Dimension, and through the fiat@ glitch, that fiat currency was invested in various things.

Was invested by Alameda, not FTX.  FTX customers invested each other's deposits all the time.  And, if you believe the defense, FTX didn't know what this customer was doing until it had already happened.  I think FTX and Alameda are treated as effectively the same company or completely separate entities depending on the context and who's speaking (I think both "sides" are guilty of this), when the reality is somewhere in between.

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