Sam Bankman-Fried’s Defense Hinge on a Missing Document

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Sam Bankman-Fried took the stand for the first time Thursday afternoon in Manhattan, but he didn’t have to answer to the jury just yet.

The dress rehearsal gave the public a glimpse into the defense’s case, which appears to rely on one document they cannot actually produce: an alleged “document retention policy” attorneys apparently drafted for Alameda and FTX. 

Senior Judge Lewis Kaplan ordered a hearing Thursday afternoon, opting to dismiss the jury early to privately hear direct testimony from Bankman-Fried, plus a cross-examination from the prosecution. 

The purpose was for Kaplan to decide what he would allow the parties to repeat in front of the jury on Friday. 

The defense strategy was clear: Establish that Bankman-Fried acted on the advice of his attorneys at the time, including following their advice to not retain certain information. The only problem? The “document retention policy” Bankman-Fried said former FTX chief regulatory officer Dan Friedberg crafted with outside counsel is nowhere to be found. 

“We have been unable to serve the subpoenas asking for it,” Bankman-Fried testified when lead prosecutor Danielle Sassoon asked where the policy was. 

Right before the court adjourned for the day, the prosecution told Kaplan that they would oppose Bankman-Fried repeating this particular point in front of the jury. Kaplan clarified that if Bankman-Fried brought up the previously rejected subpoenas in open court, the judge would tell the jury about the defense’s chance to apply for a trial subpoena.

Bankman-Fried testified that, from his understanding, enforcing auto-delete mechanisms in Signal chat was allowed. However, he added that he is unsure if Signal was actually mentioned by name in the policy.

I wish I had that policy now, I’m working off my memory of it.

Bankman-Fried

Bankman-Fried said that anything outside of know-your-customer data, “formal business discussions,” official documents, and other company-wide communications, nothing needed to be retained. 

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That said, Sassoon and Bankman-Fried’s definitions of “formal business discussions” appeared to differ. Sassoon asked, for example, if the decision to use customer funds would be considered “formal,” in Bankman-Fried’s opinion.

Any documents “still being workshopped” would not need to be retained, Bankman-Fried replied, like, for example, the seven alternative balance sheets former Alameda CEO Caroline Ellison sent via a Signal auto-deleting chat. 

After about two and a half hours on the stand, Kaplan began showing his annoyance with Bankman-Fried’s tendency to avoid answering questions directly. 

Binance Loosing Its Market Share and Cz’s Fortune Decreases by $12B

Binance co-founder and CEO Changpeng “CZ” Zhao has seen his net worth slashed by $11.9 billion amid falling trading volumes at his exchange.

On Oct. 26, the Bloomberg Billionaires Index cut Binance’s revenue estimates by 38% amid a slump in exchange volumes, which knocked Zhao down to 95th place on the rich list.

Zhao’s net worth is now a paltry $17.3 billion, registering an 82% drop from its $96.9 billion peak in January 2022, where he was ranked 11th among the world’s richest people.

Bloomberg’s index calculated Binance’s revenues from spot and derivatives trading data from crypto data aggregators CoinGecko and Coinpaprika.

As of September, the exchange’s spot trading market share had fallen for seven consecutive months to 34.3%. In January, Binance’s spot market share was over 55%.

Binance.US, its United States-based arm, also saw volumes touch new lows last month.

Zhao’s plummeting net worth and Binance’s fading trading volumes follow twin lawsuits from the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.

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Marathon Digital Plans to Raise $750 Million

After a severe crypto winter in 2022, the 100% Bitcoin price increase in 2023 has also boosted the profits of Bitcoin miners.

According to a recent filing with the U.S. Securities and Exchange Commission (SEC), Bitcoin mining giant Giant Marathon Digital is gearing up for a significant fundraiser.

According to the filing, Marathon Digital has announced plans to raise $750 million through a hybrid equity offering. The company held 13,726 bitcoins as of September 30 and generated over 1,000 bitcoins per month.

It has filed Form S-3 with the United States Securities and Exchange Commission. This offering’s proceeds will be used to purchase new mining equipment and expand the company’s operational capacity.

Marathon Digital’s stock is traded publicly on the Nasdaq under the ticker symbol “MARA.” During this week’s significant Bitcoin price increase, Marathon Digital’s stock also rose sharply.

This week, shares of Marathon Digital on NASDAQ as MARA have increased by 23%. This increase is comparable to Bitcoin’s (BTC) 12% increase over the same period, although it is essential to note that BTC trades continuously while stocks adhere to standard trading hours.

Fundamental economic principles, however, suggest that this price movement in the underlying asset is consistent with expectations

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