Mountains of FTX Evidence: Emails, Chats, Code, and Notebooks
Snippets of computer code. More than 6 million pages of emails, Slack messages, and other digital records. There is also a small black notebook filled with handwritten observations.
For months, federal prosecutors have amassed an unusual trove of evidence in the criminal case against fallen cryptocurrency executive Sam Bankman-Fried. The documents include encrypted transaction logs and encrypted group chats from Mr. Bankman-Fried’s collapsed exchange FTX, as well as startlingly personal reflections recorded by key witnesses in the case.
In a white-collar securities fraud case prosecuted by federal authorities in Manhattan, the mountain of evidence is one of the largest ever collected, according to a person familiar with the matter. For example, in the 2004 securities fraud indictment against Martha Stewart, prosecutors presented the defense team with 525,000 pages of evidence, but that number has grown significantly in recent years.
The variety and growing volume of material in the FTX case underscores the legal challenges facing Mr. Bankman-Fried, 31, charged with 13 criminal counts, including misappropriating billions of dollars in client funds, defrauding investors and campaign violations. Funding Charges Law. He pleaded not guilty.
With the trial scheduled for October, prosecutors have amassed evidence ranging from cellphones and laptops to the contents of Mr. Bankman-Fried’s Google account, which alone amounts to 2.5 million pages. At a hearing in March, Nicolas Roos, the federal prosecutor in charge of investigating FTX, said the government obtained a laptop computer crammed with so much information that FBI technology Personnel are working to decipher all of these messages.
“There is a lot of information to sift through, and sometimes you can find very useful information,” said Moira Penza, a former federal prosecutor who is now in private practice. “It’s a real challenge.”
Typically, evidence in criminal cases is largely kept secret until trial. But in Mr. Bankman-Fried’s case, interviews and a review of recent court documents offer a first look at a curious array of records gathered by FTX prosecutors.
The investigation began in November, when the collapse of FTX sent cryptocurrency markets into turmoil. Almost as soon as the exchange shut down, prosecutors began collecting documents, sending subpoenas to FTX employees and seeking records of Mr. Bankman-Fried’s funded political activities.
These requirements are usually extensive. Prosecutors wanted all FTX-related documents and dispatched a team of data specialists who spent days extracting information from a cluster of devices, one person who received the subpoena said.
While much of what prosecutors collected was typical corporate fare, other materials also pointed to unusual personal dynamics at FTX.
The black notebook, described as a diary, belonged to Bankman-Fried’s on-and-off girlfriend, Caroline Ellison, a former top lieutenant in his business empire, three people familiar with the matter said.
Ms. Ellison, formerly chief executive of hedge fund Alameda Research, a sister firm of FTX, also documented observations of Mr. Bankman-Fried in a series of electronic documents that have been shared among lawyers in the case, three people with knowledge of the matter, and Spread the legend. Ms. Ellison sometimes expressed personal and professional displeasure with Mr. Bankman-Fried, two of them said.
Attorneys and representatives for Mr. Bankman-Fried and Ms. Ellison either declined to comment or did not respond to requests for comment on the evidence in the cases. A spokesman for the Manhattan U.S. Attorney declined to comment on the discovery process.
Ms Ellison is expected to be a key witness. She pleaded guilty to fraud charges along with two other executives, Gary Wang and Nishad Singh, and agreed to cooperate with prosecutors in their pursuit of Bankman-Fried. In the days after FTX collapsed, she admitted to Alameda employees that she, Mr. Bankman-Fried, Mr. Wang and Mr. Singh had used funds from FTX clients to plug holes in Alameda accounts. She also dated Mr. Bankman-Fried and lived with him in a penthouse in the Bahamas, where the exchange is located.
Ms Penza said any personal writings by her or other witnesses could be useful to defense counsel during cross-examination.
“The biggest risk of cooperating with a collaborator is that the defense can say here that she is cooperating, lest she herself be jailed for a long time,” she said. “But a modern jury is unlikely to take their testimony at face value for a vendetta or a failed relationship.”
Many of FTX’s corporate records, including emails, Slack messages and transaction logs, are held by Sullivan & Cromwell, the law firm that took over the exchange after FTX declared bankruptcy.
In a recent court filing, lawyers for Mr. Bankman-Fried argued that prosecutors relied on Sullivan & Cromwell as their de facto agent for obtaining documents from the company. By “outsourcing” the process to the firm, prosecutors avoided legal liability for turning potentially useful evidence over to Mr. Bankman-Fried’s defense team, the lawyers claimed.
Sullivan & Cromwell’s detective work — which has filed bills totaling $55 million in bankruptcy court — has proven to work in prosecutors’ favor. In a court filing in January, Sullivan & Cromwell showed excerpts of FTX’s underlying codebase, demonstrating a feature that would allow Alameda to borrow a virtually unlimited amount of funds from the exchange.
In an email to law firm Sullivan & Cromwell that month, Mr. Roos asked FTX to provide transaction logs for accounts owned by Mr. Bankman-Fried, Ms. Ellison, Mr. Wang, Mr. Singh and two others, allegedly, The names of the two individuals have been removed. court records. He also sought transcripts of a group chat on the encrypted messaging app Signal titled “Donation Handling,” in which FTX executives discussed campaign finance matters.
Prosecutors also took evidence directly from executives in Mr. Bankman-Fried’s orbit.Last month, the FBI executed a search warrant on the $4 million Maryland home of Ryan Salame, a top FTX executive who has donated tens of millions of dollars to Republican candidates, including the recent indictment by Long Island, New York. Congressman George Santos
Agents took Mr. Salam’s cellphone as well as that of his girlfriend, Michelle Bond, a crypto lobbyist, two of the people said. Ms. Bond ran unsuccessfully for Congress last year as a Republican in another Long Island district.
Throughout the year, prosecutors have been turning over evidence to Mr. Bankman-Fried’s lawyers, a process known as discovery.
At the March hearing, Mr. Ruth provided a detailed update on the process, explaining to the judge in charge of the case, Lewis A. Kaplan, that prosecutors obtained four laptops , where the devices are too large to analyze. The laptop belonged to Mr. Wang, two people familiar with the matter said.
Lawyers for Mr. Wang, Mr. Salam and Ms. Bond did not respond to requests for comment.
Mr Ruth also said the government had handed over nearly a million documents obtained from witnesses in the case and other third parties to the defense team.
“We’ve produced 927,000 of them,” he said. “So what’s left, doing a quick math, is maybe 110,000.”
“Read before bed,” Judge Kaplan replied.