Cointelegraph reporters are on the ground in New York for the trial of former FTX CEO Sam “SBF” Bankman-Fried. As the saga unfolds, check below for the latest updates.
Oct. 11: Caroline Ellison details final months of FTX and how SBF floated selling equity to Crown Prince of Saudi Arabia
In her second day of testimony at the Sam Bankman-Fried trial on Oct. 11, Caroline Ellison provided more information regarding the months leading up to the anticipated FTX debacle in November 2022. Lenders required Alameda Research to repay millions in loans in mid-June following the market downturn in May, according to Ellison. “I was very stressed out,” she said.
Genesis Capital was one of these lenders, recalling $500 million in loans, according to screenshots taken from conversations between Ellison, Bankman-Fried, and Genesis employees via Telegram.
According to Ellison, Genesis could recall all loans to Alameda if it were aware of Alameda’s true financial status, as well as damage its reputation. “I didn’t want Genesis to know that,” she stated in reference to Alameda’s billionaire liability towards FTX.
As per prosecutors’ evidence, Ellison worked on at least seven alternative spreadsheets for Genesis. A spreadsheet sent by Alameda to Genesis in June listed $10.3 billion in total liabilities, whereas the actual amount was approximately $15 billion at the time.
The list featured raising capital from “the MBS”, borrowing more capital from BlockFi, which had already lent Alameda over $660 million, as well as “getting regulators to crack down on Binance,” an effort by Bankman-Fried to expand FTX market share, Ellison said.
She also mentioned a $150 million bribe that FTX allegedly paid to a Chinese official in 2021 to release funds frozen there as part of an investigation into money laundering. The alleged bribe is not included in the United States trial.
Oct. 5: Gary Wang details relationship between FTX and Alameda Research
In over four hours of testimony, Gary Wang, co-founder of Alameda Research and FTX alongside Bankman-Fried, provided in-depth details about the relationship between the companies and how the crypto empire ended up with an $8 billion hole in customer assets.
According to Wang, a few months after FTX’s inception, in 2019, Alameda received special privileges from FTX. Prosecutors used screenshots of FTX’s database and code available on GitHub to show that Alameda was allowed to have an unlimited negative balance at FTX, a special line of credit of $65 billion in 2022 and an exemption from the liquidation engine.
The commingling of funds and problems between companies evolved over time. In 2020, Bankman-Fried instructed Wang that Alameda’s negative balance should not exceed FTX’s revenue — a rule that changed over the years, according to Wang’s testimony. In late 2021, for example, Alameda’s liability to FTX stood at $3 billion, up from $300 million in 2020.
“I trusted his judgment,” Wang said when asked why he agreed to Alameda’s privileges.
However, these alleged privileges were part of Alameda’s role as a primary market maker for FTX, the defense argued later during Wang’s testimony. The defense counsel also noted that other market makers had similar privileges at FTX, and being able to go negative was a key feature of any market maker.
Another point emphasized by prosecutors was the MobileCoin exploit in 2021. Bankman-Fried allegedly told Wang and Caroline Ellison to add the multimillion-dollar deficit to Alameda’s balance sheet instead of keeping it on FTX to hide the loss from FTX investors.
Months before FTX’s collapse, Bankman-Fried, Wang and former engineering director Nishad Singh discussed shutting down Alameda and replacing its role with other market makers. The company’s liabilities, however, were too high at the time, sitting at $14 billion. Alameda remained in operation until November 2022.
Wang’s testimony will continue on Oct. 10, the same day Ellison’s will be heard.
Oct. 5: Yedidia cross-examination, witness testimonies in focus
A liability of $8 billion from Alameda to FTX was at the center of prosecutors’ cross-examination of Adam Yedidia on Oct. 5. Yedidia is a close friend of Sam Bankman-Fried and was a developer at FTX. He was also one of ten people to live in Bankman-Fried’s $35 million luxury resort in the Bahamas.
According to Yedidia’s testimony, since early 2021, FTX used an Alameda account labeled North Dimension to deposit users’ funds while facing difficulties opening its own bank account. Funds would be considered Alameda’s liability toward FTX, which reached $8 billion in June 2022.
While Yedidia was aware of the funds sent to Alameda’s account, he didn’t see it as a concern when he first heard about it in 2021. However, after learning about the liability amount in 2022, he voiced his concerns to Bankman-Fried during a tennis game. According to Yedidia, Bankman-Fried said the debt should be settled between the companies within six months to three years.
Scenes from outside Bankman-Fried’s trial location in New York. Source: Ana Paula Pereira/Cointelegraph
“I trusted Sam, Caroline, and others in Alameda to handle the situation,” he said, answering questions from prosecutors. Upon learning that Alameda was not only holding the funds but using them to pay its debtors, Yedidia resigned in November 2022.
While prosecutors used the case to illustrate how the companies were commingling funds, Bankman-Fried’s defense counsel sought to share a broader picture of FTX and Alameda’s relationship with the jury.
The defense highlighted that FTX was growing fast, with its leadership working over 10 hours a day during the 2021 bull market, including Bankman-Fried, who oversaw several parts of the company at the time.
The defense counsel also pointed out that Yedidia had been under several inquiries from prosecutors under an immunity order, meaning cooperation with prosecutors would protect him from facing any charges regarding his role at FTX.
Also, according to Bankman-Fried’s defense, FTX’s difficulties opening a bank account and its reliance on Alameda’s North Dimension to deposit funds were well known. Yedidia’s cross-examination will resume this afternoon in the federal courtroom in lower Manhattan.
Two witnesses testified during the second part of the Sam Bankman-Fried trial on Oct. 5: Matthew Huang, co-founder of Paradigm and Gary Wang, co-founder of FTX and Alameda Research.
Paradigm invested a total of $278 million in FTX in two funding rounds between 2021 and 2022. According to Huang, the venture capital firm was not aware of the commingling of funds between FTX and Alameda, nor of the privileges that Alameda had with the crypto exchange.
Such privileges included Alameda’s exemption from FTX’s liquidation engine (a tool that closes positions at risk of liquidation). With the exemption, Alameda was able to leverage its position and maintain a negative balance with FTX.
The Paradigm co-founder also acknowledged that the firm did not conduct deeper due diligence on FTX, instead relying on information provided by Bankman-Fried.
Another concern for Paradigm was FTX not having a board of directors. According to Huang, Bankman-Fried was “very resistant” to the idea of having investors on FTX’s board of directors but promised to build one and appoint experienced executives to serve on it.
During his brief testimony, Wang acknowledged that he, along with Bankman-fried and Caroline Ellison, had committed wire fraud, securities fraud, and commodities fraud.
Wang also noted that Alameda had special privileges with FTX, such as the ability to withdraw unlimited funds from the exchange, as well as a line of credit of $65 billion. To illustrate these privileges, Wang pointed out that any other market maker would have a credit line in the millions, while Alameda had a credit line in the billions.
A loan of approximately $200 million to $300 million from Alameda was also mentioned by Wang, allegedly as part of the purchase of other crypto firms. However, the loans were never credited to his account. His testimony will continue on Oct. 6.
Oct. 4: DOJ and Bankman-Fried’s defense state their arguments
The first hours of SBF’s trial have offered a glimpse of the arguments the United States Department of Justice (DOJ) and the former FTX CEO’s defense will bring to court in the coming weeks.
After a jury selection in the morning, both parties gave opening statements to the 12-person jury present in the court.
The DOJ took a tough stance against Bankman-Fried in its first statement, portraying the FTX founder as someone who deliberately lied to investors to enrich himself and expand his crypto empire.
According to the DOJ, Bankman-Fried lied to FTX customers and investors, using Alameda as a key partner to “steal customers’ funds,” a phrase that was frequently used during the opening statements.
A sign outside Bankman-Fried’s trial location in New York. Source: Ana Paula Pereira/Cointelegraph
As per the trial preview, the DOJ will focus its arguments on allegations that Bankman-Fried misled customers, investors and lenders regarding the safety of their funds while using Alameda to steal their money and influence politicians in Washington.
The defense, meanwhile, brought arguments about Bankman-Fried being a young entrepreneur who made business decisions that “didn’t work out.” The defense denied the existence of secret transactions between Alameda and FTX or a backdoor used to steal customer funds. According to the previous arguments presented, all transactions were legitimate or made in good faith by Bankman-Fried during the crypto market downturn and the subsequent collapse of FTX in November 2022.
The defense also highlighted the role of Binance in the bank run that led to FTX’s collapse. Testimonies will continue throughout the day.
According to the defense, Bankman-Fried assumed FTX was allowed to loan funds to Alameda as part of a business relationship with the market maker, and there was no secret door for transactions between the companies.
Prosecutors also noted that Caroline Ellison, Gary Wang and Nishad Singh will offer the jury insider details about Bankman-Fried’s role in FTX’s operations and alleged crimes. However, the defense pointed out that as part of the cooperation agreement with the government, they were supposed to give testimony against Bankman-Fried, raising doubts about their credibility.
The defense also downplayed the accusations against the nature of the relationship between FTX and Alameda, arguing that FTX margin traders were aware of the risks associated with transactions.
“There was no theft,” the defense claimed. “It’s not a crime to be the CEO of a company that files for bankruptcy.”
In the second half of the first day of the trial, the jury heard from two witnesses: Mark Julliard, a French trader and former client of FTX, and Adam Yedidia, a friend of Sam Bankman-Fried and former employee at Alameda Research and FTX.
In his testimony, Julliard said he had four Bitcoin (BTC) held at FTX at the time of the exchange’s collapse, worth nearly $100,000. He admitted that FTX and Bankman-Fried’s marketing efforts, as well as the notable venture capital companies backing FTX, gave him the confidence to use the exchange for crypto trading. He assumed that venture capital firms had done due diligence on FTX and its leadership.
During the questioning, prosecutors emphasized that the trader used FTX exclusively for spot trading and was unaware that the exchange used client funds for crypto trading with Alameda Research.
Questions for Yedidia were focused on his educational background at the Massachusetts Institute of Technology, where he first met Bankman-Fried and had two professional experiences with the FTX founder. Yedidia worked at Alameda briefly in 2017 as a trader and then returned to work for FTX in 2021 as a developer. He was among 10 people living in the Bahamas on FTX’s $30 million real estate.
In Yedidia’s testimony, prosecutors used former FTX ads as evidence that the company was always positioning itself as a safe, trusted and easy way to invest in cryptocurrency, including marketing campaigns with NFL player Tom Brady and comedian Larry David. The trial will resume Oct. 5.
Oct. 3: SBF trial begins
Bankman-Fried’s trial will take place in a Manhattan federal court. Source: Ana Paula Pereira/Cointelegraph
The trial of Sam Bankman-Fried began on Oct. 3 with jury selection. Bankman-Fried is charged with seven counts of conspiracy and fraud in connection with the collapse of FTX, the cryptocurrency exchange he co-founded. He has pleaded not guilty to all charges. The case is being heard by Judge Lewis Kaplan, who has presided over a long list of other high-profile cases, including ones involving detainees at Guantanamo Bay, the Gambino crime family, Prince Andrew and Donald Trump.
Bankman-Fried was ordered to be jailed on Aug. 11 after Kaplan found that his sharing of former Alameda Research CEO Caroline Ellison’s personal papers amounted to witness intimidation. Alameda Research was a trading house also founded by Bankman-Fried. Previously, he had been under house arrest in his parents’ home in Stanford, California, on a $250-million bond.
December: SBF arrested
Bankman-Fried was arrested in the United States on his arrival from the Bahamas on Dec. 21, 2022. He had been arrested in the Bahamas on Dec. 12 after the U.S. government formally notified the country of charges the U.S. was filing against him. He declared his intention to fight extradition from the Caribbean nation but changed his mind after a week in Bahaman jail and consented to extradition.
Meanwhile, FTX co-founder Gary Wang and Alameda Research CEO (and reportedly sometime SBF girlfriend) Ellison agreed to plead guilty in the burgeoning case.
November: FTX collapses
Bankman-Fried’s troubles began when reports emerged on Nov. 2 that Alameda Research had a large holding of FTX Token (FTT), FTX’s utility token. That revelation led to questions about the relationship between the two entities. On Nov. 6, Changpeng Zhao, CEO of rival exchange Binance, announced that his exchange would liquidate its FTT holdings, which were estimated to be worth $2.1 billion. Zhao turned down an offer tweeted by Ellison to buy Binance’s FTT.
A run began on FTX. Bankman-Fried gave reassurances on Twitter (now X) that the exchange’s “assets are fine” and accused “a competitor” of spreading rumors. By Nov. 8, the price of FTT had fallen from $22 to $15.40.
It’s only been one week since SBF’s notorious “FTX is fine. Assets are fine.” pic.twitter.com/zKoILqquHF
Also on Nov. 8, Bankman-Fried announced on Twitter that he had come to an agreement with Zhao “on a strategic transaction.” He wrote, “Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1.”
On Nov. 9, Zhao announced that Binance would not pursue the acquisition of FTX after due diligence and more reports of mishandled funds. The price of Bitcoin (BTC) plummeted to $15,600. The FTX and Alameda Research websites went dark for a few hours. When the FTX website came back, it bore a warning against making deposits and was unable to process withdrawals.
On Nov. 10, Bankman-Fried posted a 22-part Twitter thread that began with “I’m sorry.” It was the first of a long string of public statements he made about the exchange’s fall. The following day, the entire staff of Alameda Research quit, and FTX, FTX US and Alameda Research filed for bankruptcy in the United States. Bankman-Fried resigned as FTX CEO and was replaced by John J. Ray III, who was best known for his role in the Enron bankruptcy.
As the crypto winter set in, Bankman-Fried spoke of FTX and Alameda Research’s “responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion.” The companies made a bid for Voyager Digital that was rebuffed.
Bankman-Fried, Ellison and other alumni of Jane Street Capital founded Alameda Research in 2017. Bankman-Fried went on to found FTX with Wang in 2019. Zhao was an early investor in the exchange.
This is a developing story, and further information will be added as it becomes available.
Jay Clayton, recently appointed interim US Attorney for the Southern District of New York (SDNY) and former chair of the Securities and Exchange Commission, has begun offering statements in criminal cases involving crypto fraud.
In an April 23 notice, the US Attorney’s Office said Eugene William Austin, also known as Hugh Austin, had been sentenced to 18 years in prison following his conviction on conspiracy to commit wire fraud, conspiracy to commit money laundering, and conspiracy to commit interstate transportation of stolen property. Together with his son, Brandon, sentenced to four years, Austin offered fraudulent crypto investment services, resulting in roughly $12 million in losses to more than 24 people.
“For years, Hugh Austin was the leader of a fraud and money laundering scheme that stole more than $12 million from more than two dozen victims,” said Clayton. “Austin involved his own son in his crimes, working with him to rip off victims and spending investor money on personal expenses, like luxury hotels […] Austin will now be held accountable for the harm he caused to individual investors and others.”
The criminal case involving digital assets marked one of Clayton’s first public statements since becoming the interim US Attorney on April 22. US President Donald Trump nominated Clayton on Jan. 20 when he took office. The district has since seen the resignation of acting US Attorney Danielle Sassoon in response to the Justice Department directing her to halt a case against New York City Mayor Eric Adams.
The nation’s ‘sovereign district’ overseen by a Trump appointee?
Under current law, Clayton can serve as interim US Attorney for the district for 120 days without Senate confirmation. Senate Minority Leader Chuck Schumer blocked a vote on Clayton’s nomination, saying Trump had “no fidelity to the law.”
Clayton will likely oversee SDNY during the sentencing hearing for former Celsius CEO Alex Mashinsky and potentially other criminal cases involving cryptocurrency. The district is home to Wall Street firms and many of the country’s most prominent financial institutions.
The US Securities and Exchange Commission (SEC) crypto task force, headed by Hester Peirce, has continued meeting with digital asset company representatives as the agency explores regulatory changes.
In an April 24 notice, the SEC task force disclosed a meeting with representatives from crypto firm Ondo Finance and the law firm Davis Polk and Wardwell to discuss “issuing and selling wrapped, tokenized versions of publicly traded US securities.” Ondo Finance donated $1 million to Donald Trump’s inauguration fund, and the law firm announced on April 22 that it would represent the US President’s social media company, Truth Social, to launch crypto-linked exchange-traded funds.
According to the meeting request, Ondo Finance planned to discuss registration requirements for tokenized securities, compliance with financial laws, and potentially launching a regulatory sandbox. Cointelegraph reached out to the firm for comment but did not receive a response at the time of publication.
The April 24 meeting was the latest in the SEC crypto task force’s outreach to the industry following the departure of former chair Gary Gensler. Former commissioner and Trump appointee Paul Atkins took over leadership at the agency on April 21 after his swearing-in ceremony, but has yet to take action on his proposed crypto agenda.
Continuing outreach to industry under new SEC chair
On April 25, the crypto task force will host a roundtable event to discuss custody, including representatives from Kraken, Anchorage Digital Bank, WisdomTree, and others. Following the approval of crypto exchange-traded funds in 2024, many financial institutions have seen demand for digital asset custody in the US grow significantly.
It’s unclear what the SEC’s intentions may be regarding pursuing crypto enforcement cases under Atkins. The commission has stated it will continue cases involving fraudulent activity, but dropped a complaint against Hex founder Richard Heart on April 21.
The agency has already announced it will stop investigations or lawsuits against many firms, including Ripple, Coinbase, and Kraken. All three exchanges donated or had executives who supported Trump’s 2024 campaign or inauguration fund.
Opinion by: Igor Zemtsov, chief technology officer at TBCC
Crypto security is a ticking time bomb. Updatable firmware might just be the match that lights the fuse.
Hardware wallets have become the holy grail of self-custody, the ultimate safeguard against hackers, scammers and even government overreach. There’s an inconvenient truth, however, that most people ignore: Firmware updates aren’t just security patches.
They’re potential backdoors, waiting for someone — whether a hacker, a rogue developer or a shady third party — to kick them wide open.
Every time a hardware wallet manufacturer pushes an update, users are forced to make a choice. Hit that update button and hope for the best, or refuse to update and risk using outdated software with unknown vulnerabilities. Either way, it’s a gamble.
In crypto, a bad gamble can mean waking up to an empty wallet.
Firmware updates aren’t always your friend
Updating firmware sounds like common sense. More security! Fewer bugs! Better user experience!
Here’s the thing: Every update is also an opportunity not just for the wallet provider but for anyone with the power, or motivation, to tamper with the process.
Hackers dream of firmware vulnerabilities. A rushed or poorly audited update can introduce tiny, almost imperceptible flaws — ones that sit in the background, waiting for the right moment to drain funds. And the best part? Users will never know what hit them.
Then there’s the more unsettling possibility: deliberate backdoors.
Tech companies have been forced to include government-mandated surveillance tools before. What makes anyone think hardware wallet makers are exempt? If a regulatory agency — or worse, a criminal organization — wants access to private keys, firmware updates are the perfect attack vector. One hidden function. One disguised line of code.
That’s all it takes. Still think firmware updates are harmless?
Firmware vulnerabilities are already being exploited
This isn’t some far-fetched, doomsday scenario. It has already happened.
Ledger, one of the biggest names in crypto security, had a major security crisis in 2018 when security researcher Saleem Rashid exposed a vulnerability that allowed attackers to replace Ledger Nano S firmware and hijack private keys. Nearly 1 million devices were at risk before a fix was rolled out. The scary part? There was no way for users to know if their devices had already been compromised.
In 2023, OneKey suffered a similar nightmare. White hat hackers demonstrated that its firmware could be cracked in mere seconds. No crypto was lost — this time. But what if real attackers had found the flaw first?
Then came the “Dark Skippy” exploit, taking firmware-based attacks to an entirely new level. With just two signed transactions, hackers could extract a user’s entire seed phrase — without setting off a single alarm. If firmware updates can be manipulated this easily, how can anyone be sure their assets are safe?
The hidden price of updatable firmware
To be fair, not all firmware updates are security disasters. Ledger uses a proprietary operating system and secure element chips for added protection now. Trezor takes an open-source approach, allowing the community to scrutinize its firmware. Coldcard and BitBox02 give users manual control over updates, reducing — but not eliminating — risk.
Here’s the real question: Can users ever be 100% sure that an update won’t introduce a fatal flaw?
Some wallets have decided to eliminate the risk altogether. Tangem ships with fixed, non-updatable firmware, meaning that its code can never be altered once the device leaves the factory. No updates. No patches.
Of course, this approach has its trade-offs. If a vulnerability is discovered, there’s no way to fix it. But in security, predictability matters.
Real crypto security means taking back control
The crypto market was worth $2.79 trillion as of March 2025. With that much money on the table, cybercriminals, rogue insiders and overreaching governments are always looking for weak points. Hardware wallet makers should be laser-focused on security.
Choosing a hardware wallet shouldn’t feel like gambling with private keys. It shouldn’t involve blind trust in a corporation’s ability to push updates responsibly. Users deserve more than vague reassurances. They deserve security models that put control where it belongs — with them.
Security isn’t about convenience. It’s about control. Any system that requires trusting unknown developers, opaque update processes or firmware that can be changed at will? That’s not control. That’s a liability.
The only real way to keep a hardware wallet safe? Remove the guesswork. Strip away the blind trust. Always research the developers’ backgrounds, check their track record for security incidents, and see how they’ve handled past vulnerabilities. Stick to verifiable facts — security should never be based on assumptions.
Opinion by: Igor Zemtsov, chief technology officer at TBCC.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.