Kenne Michael 
Former CEO Sam Bankman-Fried was “freaking out” about Alameda weeks and months before the collapse of crypto exchange FTX, buying shares in Snapchat, raising funds from Saudi royalty, and lobbying regulators to crack down on rival crypto exchange Binance.
Thus was written in the personal notes of former Alameda Research CEO Caroline Ellison regarding FTX and Alameda, which prosecutors presented on the second day of her testimony in New York.
During the trial, Ellison told the jury that a crash in the Terra ecosystem in May 2022 was significant enough for Bankman-Fried to consider shutting down Alameda and raising $1 billion in capital from the Saudi Prince, known for his investments in blockchain gaming via Saudi Arabia’s sovereign wealth fund.
According to Ellison, Bankman-Fried’s other priority a year ago was “getting regulators to crack down” on the crypto exchange Binance, a move intended to increase FTX’s market share.
She did not specify how Bankman-Fried intended to complete the task.
Meanwhile, she said that Bankman-Fried was also seeking additional funding from crypto lender BlockFi, which had already lent over $660 million to Alameda.
His other major concerns included trading Japanese government bonds, purchasing Snap Inc (SNAP) shares, and “Willie being happy.”
Although the list does not specify who “Willie” was, there is a possibility that the name was a reference to Bankman-Fried’s mentor, William MacAskill.
Ellison claims that Bankman-Fried blamed her for Alameda’s difficulties and inadequate hedging.
During the trial, Ellison admitted that a stronger hedge strategy could have helped Alameda handle the crypto winter but also noted that the company had large open-term loans and had spent billions from its FTX line of credit.
Open-term loans have no maturity date, so the borrower has the option to prepay, while the lender has the call option.
In June, creditors, including Genesis Capital, began to enforce their call option, requiring Alameda to repay millions of dollars.
Under the direction of Bankman-Fried, Ellison repaid a portion of Alameda’s debts with FTX customer funds.
She stated that Alameda’s liabilities with FTX totaled $13.7 billion in September 2022, while its open-term loans stood at $1.3 billion.
Additionally, at Bankman-Fried’s request, Ellison created “alternative” spreadsheets for Alameda’s lenders, concealing the company’s financial liabilities with FTX in order to make it “look better” and prevent lenders from demanding full repayment.
Ellison disclosed instances of emotional distress.
She expressed concern during the trial about the possibility of consumers withdrawing their funds from FTX in light of the “liquidity crush” at Alameda.
“Every day, I was worrying about the possibility of [loans] being called at the same time.”
The cross-examination of Ellison by Bankman-Fried’s defense will commence on October 12.