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personpersonPeter Douglas EastonPeter Douglas EastonUniversity of Notre Dame accounting professor with expertise in finance, accounting, and financial-statement analysis.← All People
Witness· University of Notre Dame

Peter Douglas Easton

University of Notre Dame accounting professor with expertise in finance, accounting, and financial-statement analysis.

AppearedFederal Criminal Trial
410 lines·12 proceedings·7 mentions

About

Called by the government on Day 11, Easton testified as an accounting expert about financial analysis and tracing based on bank statements, the FTX database, blockchain transactions, third-party records, and internal messages. The court admitted the government's evidentiary exhibits while instructing the jury that Exhibits 3000 through 3016 were demonstrative aids rather than evidence.

On direct examination, Easton compared fiat customer liabilities with funds in relevant bank accounts. He testified that liabilities peaked at $11.3 billion in June 2022 while approximately $2.3 billion was present in those accounts, and he traced selected funds to investments, political and charitable payments, Bahamian real estate, and Robinhood shares. He distinguished direct tracing from conclusions based on relative inflows and identified transactions or categories that the records did not permit him to trace directly.

Easton also compared customer cryptocurrency balances with analyzed wallet holdings, correcting his October 31, 2022 calculation to a $10.3 billion difference. He described Alameda accounts permitted to carry negative balances, traced customer cryptocurrency to the Binance stock buyback and lender repayments, and testified that documented spot-margin borrowing could not explain Alameda's negative balance.

Cross-examination tested the scope and assumptions of that analysis. Easton acknowledged uncertainty about the composition of approximately $3.5 billion in Genesis payments, agreed that two charts differed by about $7 billion because they used different account and currency scopes, and confirmed that he had not excluded the FTX bank-account portion from one fiat presentation. He also acknowledged that his presentation focused on Alameda balances held at FTX, that Alameda held assets elsewhere, and that he did not perform a net asset value analysis, while maintaining that alternative date windows would not change his tracing conclusions.

On redirect, Easton said that the Genesis funds came from customer flows or other inflows regardless of whether the payments represented principal or interest, and he explained that cryptocurrency fluctuations and other activity affected negative balances. On recross, he explained that a hypothetical payment following an outside Bitcoin deposit would be classified according to whether the relevant cryptocurrency balance remained negative after the deposit.

Trial Record (12)

FederalFederal Criminal TrialOct 3, 2023 – Nov 2, 2023Called by prosecution

Called by the government on Day 11, Easton presented accounting and financial-tracing analysis of fiat and cryptocurrency shortfalls, selected fund uses, Alameda's negative balances, and lender repayments. Cross-examination tested his account scope, classifications, date windows, and acknowledged analytical limits.

Day 10

ProceduralExpert Exhibit Admissibility HearingMentioned

Summary

The court heard disputes over Peter Easton's proposed expert exhibits, reserved decision on Government Exhibit 1051, and asked the parties to narrow objections to demonstratives and financial-tracing charts.

Mentioned in this proceeding.

Day 11

DirectPeter Douglas Easton — DirectPeter Douglas EastonNicolas Roos8highlights285lines spoken

Summary

Accounting expert Peter Douglas Easton quantified fiat and cryptocurrency shortfalls, traced selected customer funds through Alameda and FTX accounts to investments and other expenditures, and testified that spot-margin borrowing could not explain Alameda's negative balance.

Highlights (8)

Quote“the amount of customer deposits held in Alameda Research and FTX.com accounts was way less than was owed to customers on FTX.”— Peter Douglas EastonEaston's initial high-level conclusion framed the financial shortfall addressed throughout his testimony.Open in transcript →
testimony highlightEaston testified that the fiat customer liability peaked at $11.3 billion in June 2022 while approximately $2.3 billion was present in the relevant bank accounts.Open in transcript →
Quote“I really haven't analyzed that. There was a limit to the resources we have to analyze this material, but a lot of this was in fact investing -- investment in crypto.”— Peter Douglas EastonEaston expressly identified a limit on his analysis of the remaining expenditure category.Open in transcript →
rulingAfter overruling an objection to Exhibit 1051, the court permitted Easton to compare customer cryptocurrency balances with wallet holdings; Easton corrected his initial answer and stated a $10.3 billion difference on October 31, 2022.Open in transcript →
Show all 8 highlights
Quote“I'm sorry. The amount that should have been in the wallets was 11.4 billion. The amount that was in the wallets was 1.1., so there is a difference of 10.3 billion.”— Peter Douglas EastonEaston corrected his initial figure and stated the cryptocurrency-wallet difference he calculated for October 31, 2022.Open in transcript →
testimony highlightEaston summarized his tracing of lender repayments, testifying that 68 percent, or $4.5 billion, came from customer funds.Open in transcript →
testimony highlightEaston testified that neither Alameda's own spot-margin borrowing nor all borrowing available through that program could explain its negative FTX balance, and he identified customer funds as the source used when Alameda incurred the balance.Open in transcript →
Quote“The actual Alameda borrowing on this spot-margin program was far less than the amount needed to cover this negative balance.”— Peter Douglas EastonThe statement summarizes Easton's comparison between Alameda's negative balance and its documented spot-margin borrowing.Open in transcript →
CrossPeter Douglas Easton — CrossPeter Douglas EastonDavid F. Lisner8highlights110lines spoken

Summary

The defense challenged Easton's account selection and tracing assumptions, eliciting concessions about scope-dependent balance figures, uncertainty over Genesis payments, and an FTX liability included in an Alameda balance chart.

Highlights (8)

impeachmentEaston was uncertain whether the approximately $3.5 billion paid to Genesis represented principal, interest, or both. Documents shown to refresh his recollection did not resolve whether selected Ethereum transfers were principal repayments or collateral postings, and the court struck an answer that merely read from a displayed document.Open in transcript →
Quote“It is payment of an amount owing to the third party, Genesis. Whether it's payment of owed interest as well as principal, I'm not sure as I sit here now.”— Peter Douglas EastonEaston qualified his ability to classify the Genesis payments as principal, interest, or both.Open in transcript →
admissionThe defense compared balance charts with different account and currency scopes. Easton agreed that GX 1002 and GX 1005 produced values differing by about $7 billion for the same April 2022 date, depending on the variables included.Open in transcript →
admissionEaston agreed that customer deposits held in FTX bank accounts were FTX rather than Alameda liabilities, that the fiat subaccount included deposits received through FTX accounts, and that he had not excluded that FTX portion from GX 1005.Open in transcript →
Show all 8 highlights
admissionEaston agreed that his presentation relied on Alameda balances held on FTX, acknowledged Alameda also held assets on other exchanges and in venture capital, and confirmed that he did not conduct a net asset value analysis.Open in transcript →
testimony highlightEaston explained that his flow-of-funds windows extended backward until sufficient funds appeared in the daily data. He maintained that longer or shorter windows would not change his conclusion, although he had not presented the checking analysis.Open in transcript →
Quote“So I went back in time, recognizing that the data is daily data, not time-stamped data, until I found sufficient funds to cover 5.5 million in this example.”— Peter Douglas EastonEaston described the rule he used to choose the date window for a flow-of-funds analysis.Open in transcript →
Quote“Absolutely not, and I've checked that out.”— Peter Douglas EastonEaston firmly rejected the suggestion that changing the date windows would alter his asset-use conclusions.Open in transcript →
RedirectPeter Douglas Easton — RedirectPeter Douglas EastonNicolas Roos1highlight9lines spoken

Summary

Easton clarified the source of funds used for Genesis payments and testified that the balances examined on cross remained negative despite cryptocurrency fluctuations and other account activity.

Highlights (1)

Quote“The source of funds for either payment was either customer flows or other inflows. That was my focus.”— Peter Douglas EastonEaston clarified that his tracing conclusion concerned the source of the Genesis payments rather than whether they represented principal or interest.Open in transcript →
RecrossPeter Douglas Easton — RecrossPeter Douglas EastonDavid F. Lisner1highlight6lines spoken

Summary

Easton explained that his tracing method treated cryptocurrency payments from a still-negative Alameda balance as drawing on customer funds, even after an outside deposit reduced the deficit.

Highlights (1)

Quote“If the account balance of the particular cryptocurrency was negative and that particular cryptocurrency was used to pay the loan, it would be considered dipping into customer funds. Where else could it have come from?”— Peter Douglas EastonEaston defended his conclusion that a loan payment from a negative cryptocurrency balance drew on customer funds.Open in transcript →

Day 16

Day 17

Day 18