Allegations of SBF’s MBS Investment Plan in FTX Trial

Caroline Ellison, the former CEO of Alameda Research, alleged in court that Sam “SBF” Bankman-Fried attempted to raise capital for FTX by considering an investment from Mohammed bin Salman, or MBS.

Ellison purportedly told the court during SBF’s criminal trial on October 11 that she and Bankman-Fried had discussed strategies for hedging Alameda’s investments in 2022.

According to the former chief executive officer of Alameda, Bankman-Fried, MBS was a potential investor in the cryptocurrency exchange before its November collapse.

The prospective investment by MBS was one of the notes mentioned in 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 agenda included “raising funds from MBS” and turning regulators against the Binance cryptocurrency exchange.

MBS, the crown prince and prime minister of Saudi Arabia, has invested in blockchain gaming through the country’s sovereign wealth fund.

His net worth is in the billions. However, he was also allegedly involved in the murder of Washington Post journalist Jamal Khashoggi at the Saudi consulate in Istanbul in 2018.

Puck reported in April that Bankman-Fried conferred with MBS in Saudi Arabia approximately two weeks before FTX declared bankruptcy.

Although SBF was reportedly seeking to raise $1 billion for FTX, Saudi investors were willing to contribute approximately $250 million—the same amount a judge required for a bond after the former CEO was arrested in the United States.

Ellison’s testimony will likely continue through October 11 and into October 12, when SBF’s attorneys will cross-examine her.

At the time of publication, she had admitted to fraud during her tenure as CEO of Alameda and placed the majority of the blame for the misappropriation of customer funds on Bankman-Fried, directing her to provide misleading financial information to Genesis lenders.

Prosecutors in the criminal trial of Bankman-Fried estimated that they would rest their case on October 26 or 27, after which SBF’s attorneys would begin summoning witnesses.

Bankman-Fried has pleaded not guilty to seven criminal counts related to fraud at FTX, in addition to five offenses that will be tried in March 2024.