Sam Bankman-Fried’s fraud trial entered its third day on Thursday, with a long-time friend and former ally, Adam Yedidia, returning to the stand as the prosecution’s witness.
Opening arguments from both the prosecution and the defense began on Wednesday. Later, the prosecution called its first witness, commodities trader Marc-Antoine Julliard, who told the court that Bankman-Fried initially seemed like someone who wanted to “do good for the industry.” However, when FTX began to unravel in November 2022, Julliard found himself unable to withdraw approximately $100,000 from the platform.
On Wednesday, Yedidia became the second witness to testify for the prosecution, revealing that he had a longstanding friendship with Bankman-Fried dating back to their student days at the Massachusetts Institute of Technology (MIT).
Yedidia testified under an immunity order, which means he cannot be charged based on his testimony as long as he tells the truth.
On Thursday, Yedidia disclosed that while they were playing padel tennis at a luxury Bahamian resort, Bankman-Fried confessed to him that his crypto hedge fund, Alameda Research, might not be able to cover the $8 billion debt.
According to Yedidia, this conversation took place in late June or July 2022, during a break in the match, when he raised concerns about the substantial amount Alameda Research owed FTX.
“It was a very large debt, and I wanted to know that Alameda could pay it,” the prosecution’s witness further revealed. He recalled that this conversation occurred while both he and Bankman-Fried were at the Albany luxury resort, where the FTX co-founder resided in a penthouse worth $35 million.
SBF Exhibits: This is the photo of/from Sam’s $35 million condo in the Bahamas that his lawyers tried yesterday to keep out, insisting he never bought a yacht. Judge Kaplan: Just a $30 million condo.
&, Inner City Press pointed out, 2 jets https://t.co/1w2tkmsrl8 pic.twitter.com/TQd5eanZMc— Inner City Press (@innercitypress) October 5, 2023
In addition to these revelations, Yedidia provided insider details on the relationship between Bankman-Fried and Caroline Ellison, the former CEO of Alameda and SBF’s lover, who later became a witness for the prosecution after reaching a plea deal with the government.
“Sometime in early 2019, the defendant told me that he and Caroline had engaged in a sexual relationship and asked for advice on whether it was a good idea to date her,” the witness disclosed when asked about what Bankman-Fried had shared with him regarding Ellison.
During the morning session, the 31-year-old, once hailed as the “golden boy of crypto” and a former billionaire, exhibited signs of nervousness. One report even described a scene where “At one point, Bankman-Fried drank water from a bottle so aggressively that the plastic crackled.”
According to Yededia, he last saw Bankman-Fried in November 2022 and submitted his resignation after receiving a call from a fellow FTX developer.
“I received a phone call from another developer at the company,” Yedidia said, adding, “I heard that Alameda Research had used FTX customer profits to repay its loans to creditors.”
When asked why he was testifying under an immunity order, Yededia explained, “I was concerned that, as a developer for FTX, I might have unwittingly written code that contributed to a crime.”
