Former FTX CEO Challenges Testimonies, Expert Reveals Fluctuating Credit Line
Former FTX CEO, Sam Bankman-Fried, has taken a decisive move to counter the testimonies given by Caroline Ellison, former Alameda Research CEO, and other witnesses regarding the financial links between FTX and the trading firm. The company plans to introduce financial expert Joseph Pimbley from PF2 Securities to provide evidence that challenges the claims made by the witnesses.
In a letter submitted to New York District Judge Lewis Kaplan on October 23, Bankman-Fried’s attorneys outlined their intention to call upon Joseph Pimbley to testify on behalf of the former FTX CEO. Pimbley’s testimony will be based on evidence derived from the FTX database and will focus on the fluctuation of Alameda’s line of credit with FTX between October 2021 and September 2022.
According to the planned testimony, Pimbley’s evidence will show that the credit line varied between approximately $1 billion and $3 billion during that period, with a decrease occurring in June 2022. This timeline is intended to establish the precise nature of the credit line.
Furthermore, Pimbley’s testimony will reveal that a significant majority of non-FTX and non-Alameda user balances on the platform are held in U.S. dollars, Bitcoin, Ether, and Tether. Additionally, more than 75% of these user balances originate from accounts that enable spot margin, spot margin lending, or display futures activity. This context is crucial for understanding the statements made by the former FTX executives.
The target of the challenge is Caroline Ellison’s assertion that Alameda had an essentially unlimited line of credit on FTX, as well as FTX co-founder Gary Wang’s claim that the firm had borrowed around $3 billion from the credit line.
Pimbley’s comprehensive 54-page report, which includes various charts, spreadsheet snippets, diagrams, and database inquiries taken from FTX’s Amazon Web Services database, focuses on FTX’s credit line with Alameda between October 2021 and November 2022.
With this move, Bankman-Fried aims to contest the testimonies given by Ellison and other witnesses, providing evidence that highlights the fluctuating nature of Alameda’s credit line and the composition of user balances on the FTX platform. It remains to be seen how this expert testimony will shape the ongoing legal proceedings and shed light on the financial links between FTX and Alameda Research.
