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Weeks and months before the collapse of crypto exchange FTX, former CEO Sam Bankman-Fried was “freaking out” about Alameda, buying shares in Snapchat, raising capital from Saudi royalty and getting regulators to crack down on rival crypto exchange Binance. 

So was written in former Alameda Research CEO Caroline Ellison’s personal notes about FTX and Alameda, which prosecutors presented on the second day of her testimony in New York. 

During the trial, Ellison told jurors that a crash in the Terra ecosystem in May 2022 was significant enough to get Bankman-Fried to consider shutting down Alameda and seeking to raise $1 billion in capital from the Saudi Prince, known for his investments in blockchain gaming through Saudi Arabia’s sovereign wealth fund. ​​

Another priority for Bankman-Fried a year ago was “getting regulators to crack down” on the crypto exchange Binance, a move intended to increase FTX’s market share, according to Ellison. She didn’t provide any details on how Bankman-Fried planned to do it.

Bankman-Fried was also seeking more funds from crypto lender BlockFi, which had already lent Alameda over $660 million, she said. His other top concerns included trading bonds issued by the Japanese government, buying Snap Inc (SNAP) stocks, and “Willie being happy.”

While the list doesn’t specify who Willie was, the name was possibly a reference to Bankman-Fried’s mentor William MacAskill.

According to Ellison, Bankman-Fried blamed her for Alameda’s troubles and poor hedging. During the trial, Ellison admitted that a better hedge strategy could have helped Alameda face the crypto winter, but noted that the company also had large open-term loans and had spent billions from its line of credit with FTX.

Open-term loans have no maturity date, meaning the borrower has a prepayment option, while the lender has a call option. In June, lenders such as Genesis Capital started enforcing their call option, requiring Alameda to repay millions of dollars. Under Bankman-Fried’s direction, Ellison repaid part of Alameda’s debts with funds from FTX customers. In September 2022, Alameda’s liabilities with FTX mounted $13.7 billion, while its open-term loans stood at $1.3 billion, she said.

In addition, and also at Bankman-Fried’s request, Ellison also created “alternative” spreadsheets for Alameda’s lenders, hiding the company’s financial liabilities with FTX to make it “look better” and to keep lenders from calling for full repayment.

Ellison also revealed moments of emotional distress. Speaking calmly and firmly during the trial, she expressed her anxiety about the possibility of customers withdrawing their funds from FTX amid the “liquidity crush” at Alameda.

“Every day, I was worrying about the possibility of [loans] being called at the same time.”

Ellison’s cross-examination by Bankman-Fried’s defense will begin on Oct. 12.

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