Alameda enjoyed privileges that were not available to other accounts, including exemption from collateral requirements and liquidation, and the ability to carry negative balances on the exchange.
Bankman-Fried asserted that it was his deputies who developed this code, and he argued that Alameda’s special privileges were essential for it to function as a market maker, a payment processor, and a backstop liquidity provider for FTX.
The trial also featured a contentious debate over the timeline of events leading up to FTX’s downfall. Bankman-Fried claimed that it was not until October 2022 that he became aware of the exchange’s liquidity crisis.
In November 2022, FTX filed for bankruptcy. Prosecutors disputed this timeline, asserting that Bankman-Fried and his three executives were aware of the impending crisis as early as June of that year when they worked on a project that unveiled an $8 billion deficit owed to FTX by Alameda.
Perhaps one of the most striking moments of the trial was when Assistant US Attorney Danielle Sassoon confronted Bankman-Fried about his actions in 2022, asking whether he had fired anyone for spending $8 billion of customer deposits.
