Sam Bankman-Fried Seeks Expert to Counter Testimony From DOJ Witnesses

Sam Bankman-Fried Seeks Expert to Counter Testimony From DOJ Witnesses – The former CEO of FTX, Sam Bankman-Fried, is planning to engage a financial expert to counter the testimonies of Caroline Ellison, Gary Wang, Nishad Singh, and Adam Yedidia. Bankman-Fried’s legal team intends to present an expert witness to challenge the statements made by Caroline Ellison and other witnesses regarding the financial connections between FTX and the trading firm.

In a letter dated October 23 addressed to New York District Judge Lewis Kaplan, Bankman-Fried’s lawyers have disclosed that Joseph Pimbley, representing the litigation consulting firm PF2 Securities, will provide testimony on behalf of the former FTX CEO. The letter outlines that Pimbley will base his testimony on FTX’s database information and reveal that Alameda’s line of credit with FTX experienced fluctuations ranging from approximately $1 billion to $3 billion between October 2021 and September 2022. 

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It also mentions a decrease in June 2022. The purpose of this testimony is to establish a clear timeline for the line of credit. Pimbley’s testimony will further indicate that a significant portion of balances held by users not associated with FTX or Alameda consists of United States dollars, Bitcoin, Ether, and Tether. Additionally, he will highlight that more than 75% of these non-FTX and non-Alameda user balances stem from accounts with spot margin features enabled, spot margin lending enabled, or displaying futures activity. 

This information may offer valuable context for the statements provided by former FTX executives during their testimony. The testimony is intended to challenge the statements made by Ellison, FTX co-founder Gary Wang, former FTX engineering director Nishad Singh, and former FTX employee Adam Yedidia concerning Alameda’s line of credit and the utilization of margin trading by FTX customers.

Pimbley is set to counter Ellison’s testimony that Alameda had “an essentially unlimited line of credit on FTX” and Wang’s testimony that the firm had borrowed “around $3 billion” from the credit line. In Pimbley’s comprehensive 54-page disclosure, you can find a wide array of charts, excerpts from spreadsheets, diagrams, and database queries extracted from FTX’s Amazon Web Services database. These materials pertain to FTX’s line of credit with Alameda and cover the period from October 2021 to November 2022.

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Pimbley is being remunerated at a rate of $720 an hour plus expenses for his work, but he said he has “no financial interest in the outcome of this case.” He was among the seven expert witnesses initially presented by Bankman-Fried’s legal team. However, Judge Kaplan ruled to prevent their testimony initially, but he left the door open for potential future testimony if they could address and provide clarification in response to the testimony given by government witnesses.

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