SBF allegedly believed his hair was ‘very valuable’: SBF trial live updates

FTX co-founder Sam Bankman-Fried faces seven federal charges in a criminal trial taking place in Manhattan. The former crypto exchange exec is accused of misappropriating billions of dollars of customer funds for real estate, donations, political contributions and investments. 

The current state of play: Caroline Ellison’s cross-examination is officially underway after a bit of a hectic direct examination. On Wednesday, Ellison alleged bribes to Chinese officials, fake balance sheets, and a careful approach to written communication for fear of “legal trouble.” Read more here.

10:00 am ET: Caroline Ellison’s cross-examination really begins

In the four-hour-long direct examination of the former Alameda co-CEO and on-again-off-again Sam Bankman-Fried love interest, Caroline Ellison, a lot of tea was spilled. 

Specifically, she alleged Chinese bribes using Thai sex workers, and that Genesis reportedly requested a return of $500 million due to potential concerns in the summer of 2022, before the bankruptcy filing in January 2023. Moreover, former executives at FTX are said to have embraced a culture of secrecy in hopes of avoiding, well, a trial. Guess that idea didn’t pan out.

Read more: SBF demanded 7 versions of Alameda’s balance sheet, Ellison testifies

Let’s go over some highlights that may have been overlooked yesterday.

Ellison alleges that SBF “said that he wanted FTX to have the image of being a, you know, exciting, innovative place to trade on, similar to offshore exchanges, but also being safe, reliable, audited, and highly regulated, like other US exchanges.” 

If what Ellison, FTX co-founder Gary Wang and former FTX employee Adam Yedidia have said about FTX so far during this trial has any ounce of truth, then the key word there is “image.”

Bankman-Fried, Ellison alleges, “always directed us to be careful about what we put in writing” so that they wouldn’t “get in legal trouble.” Boy, do we have news for you, Sam…

Ah, and SBF’s Toyota Corolla got another mention in testimony yesterday. Specifically, Ellison alleges that she and Bankman-Fried were both originally “assigned luxury company cars” but then SBF swapped to a Corolla and Ellison got a Civic, because it was better for their images. 

Last week, the defense — specifically Chrisitan Everdell — asked former FTX employee Adam Yedidia if he recalled seeing a Corolla, in an apparent attempt to show that Bankman-Fried didn’t splurge on expensive items.

Ellison also added that personal image was very important to SBF. When asked what Bankman-Fried’s personal appearance looked like in 2022, she said “I would say he looked like he didn’t put a lot of effort into his personal appearance. He dressed sort of sloppily and didn’t cut his hair often.”

Read more: 5 hidden gems from Caroline Ellison’s FTX testimony you might’ve missed

But actually, Bankman-Fried allegedly believed, “his hair had been very valuable. He said ever since Jane Street, he thought he had gotten higher bonuses because of his hair and that it was an important part of FTX’s narrative and image.” Perhaps that explains the pre-trial haircut.

Another moment worth highlighting was a sidebar that we’re now privy to thanks to the invaluable work of court reporters. According to Wednesday’s Court transcripts, the prosecution complained to Judge Lewis Kaplan and SBF’s lawyer, Mark Cohen, in a sidebar conversation. 

Prosecutor Danielle Sassoon alleged that Bankman-Fried “has laughed, visibly shaken his head, and scoffed.” Sassoon was concerned, she said, about the impact it could have on Ellison due to the “history of this relationship, the prior attempts to intimidate her, the power dynamic, their romantic relationship.”

Sassoon, presumably, was referring to the alleged leaking of Ellison’s diary to a New York Times reporter. Bankman-Fried was accused of the leak by the prosecution, and his bail was revoked just months before the trial started. 

In response, the judge admitted that he had not been looking for a response from Bankman-Fried and therefore did not see anything. However, he directed Cohen to talk to SBF “and if he’s doing anything, it should stop; and if he’s not, then no harm, no foul.”

There were actually so many sidebars yesterday that the Judge — at the end of the day Wednesday — instructed the lawyers to “hold the sidebars to a minimum from now on.”

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