Caroline Ellison’s Take on FTX-Binance Clash: Hodler’s Digest, October Edition

Caroline Ellison, the former CEO of Alameda Research, testified for over 10 hours at Sam Bankman-Fried’s trial this week, shedding light on the events leading up to the FTX debacle in November 2022. According to Ellison, she had planned to step down from Alameda months before its collapse but was concerned about a potential bank run on FTX due to the downturn in the crypto market. The trial also featured a recording in which Ellison informed employees about Alameda’s use of FTX customer deposits. Other key moments in the trial included revelations of fabricated balance sheets to deceive crypto lenders and testimony from BlockFi CEO Zac Prince.

Months before the collapse of FTX, Bankman-Fried was reportedly concerned about various issues, including buying shares in Snapchat, raising capital from Saudi royalty, and pushing regulators to crack down on Binance, a rival crypto exchange. Bankman-Fried believed that Binance had leaked an Alameda balance sheet to the media and engaged in a PR campaign against Alameda. The leaked balance sheet supposedly triggered a public announcement from Binance about selling $500 million worth of FTT tokens.

In other news, the United States Securities and Exchange Commission (SEC) has decided not to appeal a recent court decision that favored Grayscale Investments. The court ruling requires the SEC to review Grayscale’s spot Bitcoin exchange-traded fund (ETF) application. However, this does not guarantee approval for Grayscale’s application. The SEC must follow the court’s order and review the application to convert the Grayscale Bitcoin Trust into a spot Bitcoin ETF.

Terraform Labs has accused market maker Citadel Securities of playing a role in the collapse of its TerraUSD stablecoin in 2022. Terraform has filed a motion to compel Citadel Securities to produce documents related to its trading activity during the depegging of TerraUSD Classic. Terraform argues that these documents are crucial for its defense against a lawsuit filed by the SEC, which alleges a multi-billion dollar crypto asset securities fraud orchestrated by Terraform Labs and its founder, Do Kwon. Citadel Securities has denied trading the TerraUSD stablecoin during the depegging.

Mastercard has successfully completed a trial involving the wrapping of central bank digital currencies (CBDCs) on different blockchains. This trial, conducted with the Reserve Bank of Australia and the country’s Digital Finance Cooperative Research Centre CBDC, allowed CBDC owners to purchase nonfungible tokens listed on Ethereum. The solution locked the required amount of pilot CBDC on the RBA’s CBDC platform and minted an equivalent amount of wrapped pilot CBDC tokens on Ethereum.

In the cryptocurrency market, Bitcoin is trading at $26,892, Ether at $1,551, and XRP at $0.48. The total market cap is at $1.05 trillion. Among the top gainers this week are Loom Network, Trust Wallet Token, and Tether Gold, while the top losers are Mantle, Rocket Pool, and Avalanche.

In conclusion, Caroline Ellison’s testimony at Sam Bankman-Fried’s trial provided additional insights into the events leading up to the collapse of FTX. The trial also featured revelations of fabricated balance sheets and testimony from industry figures like Zac Prince. In other news, the SEC has decided not to appeal a court decision favoring Grayscale Investments, and Terraform Labs has accused Citadel Securities of involvement in the collapse of its stablecoin. Lastly, Mastercard has successfully conducted a trial involving the wrapping of CBDCs on different blockchains.

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