Skip to content
Federal Criminal Trialtrial-daytrial-daySamuel RaymondThane RehnNicolas RoosDanielle R. SassoonMark S. CohenChristian R. EverdellDavid F. LisnerPeter Douglas EastonCory GaddisEliora Michaela KatzShamel MedranoPaige OwensdirectcrossredirectrecrossDay 11 - October 18, 2023Katz addressed FTX’s congressional claims, Easton presented and defended his fund-tracing analysis, and records witnesses introduced metadata, messages, and political-spending charts subject to stated limits.
← Day 10Federal Criminal TrialDay 12 →

Day 11 - October 18, 2023

Katz on FTX Public Claims, Easton’s Fund Tracing, and Political-Spending Records

Judge Lewis A. Kaplan
16Proceedings
7Pages
5Witnesses
2,570Lines
1Sidebars
Day 11 of 19
Appearing:

Katz addressed FTX’s congressional claims, Easton presented and defended his fund-tracing analysis, and records witnesses introduced metadata, messages, and political-spending charts subject to stated limits.

Full day summary

Eliora Katz described her FTX US government-relations role and participation in meetings with policymakers. The government presented congressional testimony and submissions describing FTX’s approach to risk, withdrawals, and customer assets. Katz said she believed Bankman-Fried’s public statements about how FTX worked while she was employed there, but explained that much of the material predated her employment, that she did not draft it, and that she lacked visibility into the relevant operations. On cross, she confirmed that she worked at FTX from April through November 2022 and did not work on the written congressional testimony. Accounting professor Peter Easton testified that fiat customer liabilities peaked at $11.3 billion while approximately $2.3 billion was present in the relevant bank accounts. He also corrected his October 31, 2022 cryptocurrency calculation to a $10.3 billion difference and described tracing funds to investments, lender repayments, political contributions, donations, real estate, and Robinhood shares. The court instructed the jury that the government’s illustrative aids were not evidence. Cross-examination addressed Easton’s uncertainty about whether Genesis payments represented principal, interest, or both; differences between charts with distinct account and currency scopes; the inclusion of deposits held in FTX bank accounts; assets held outside FTX; and the absence of a net asset value analysis. Easton maintained that changing his tracing windows would not alter his conclusions. Google records custodian Cory Gaddis authenticated 18 exhibits using files and metadata from Google’s production, while acknowledging on cross that he lacked substantial metadata expertise. Outside the jury’s presence, the court overruled defense objections to November 2022 messages and a related exhibit, then faulted both sides for failing to coordinate about metadata. Investigative analyst Shamel Medrano presented stipulated Twitter records and private messages but acknowledged that prosecutors selected the messages and that he lacked firsthand knowledge of their surrounding circumstances. FBI forensic accountant Paige Owens presented three charts using a last-in, first-out method to trace transfers through accounts associated with Samuel Bankman-Fried, Nishad Singh, and Ryan Salame to political contributions. On cross, she agreed that last-in, first-out and first-in, first-out methods can produce different results because funds are fungible. After reviewing account statements, she attributed one VIEW PAC payment to Heller & Robbins rather than North Dimension under the selected method and acknowledged that her analysis did not determine where funds entering the source accounts originated.

1. Eliora Michaela Katz — Direct/Cross

Day 11 began with Eliora Michaela Katz's testimony about FTX's congressional outreach and public claims regarding risk, withdrawals, and customer assets, followed by cross-examination about her limited role in preparing those materials.

Direct
Eliora Michaela Katz — Direct Eliora Michaela Katz Samuel Raymond
317 lines

Eliora Katz described FTX US's policy advocacy and Bankman-Fried's congressional appearances, then addressed public claims about customer protection while emphasizing that she neither drafted the earlier materials nor knew the underlying operations.

Cross
Eliora Michaela Katz — Cross Eliora Michaela Katz Mark S. Cohen
40 lines

Katz confirmed her limited tenure at FTX, described Mark Wetjen's CFTC background, and said she did not work on the written congressional testimony prepared by Wetjen and Mr. Bankman-Fried.

Highlights

2. Peter Douglas Easton — Direct/Cross/Redirect/Recross

Accounting professor Peter Douglas Easton completed testimony about his tracing of FTX customer funds, with the defense challenging his methods, account scope, and conclusions before redirect and recross.

Direct
Peter Douglas Easton — Direct Peter Douglas Easton Nicolas Roos
773 lines

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.

1 sidebar inside this proceeding
  1. Scope of Political-Spending TestimonyCounsel discussed limiting an accountant's testimony to tracing funds rather than addressing the nature or validity of political donations.
Cross
Peter Douglas Easton — Cross Peter Douglas Easton David F. Lisner
382 lines

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.

Redirect
Peter Douglas Easton — Redirect Peter Douglas Easton Nicolas Roos
25 lines

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.

Recross
Peter Douglas Easton — Recross Peter Douglas Easton David F. Lisner
23 lines

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

Peter Douglas Easton — Directtestimony 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.Peter Douglas Easton — DirectrulingAfter 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.Peter Douglas Easton — Direct“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.Peter Douglas Easton — Directtestimony highlightEaston summarized his tracing of lender repayments, testifying that 68 percent, or $4.5 billion, came from customer funds.Peter Douglas Easton — Cross“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.Peter Douglas Easton — CrossadmissionThe 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.Peter Douglas Easton — CrossadmissionEaston 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.

6. Paige Owens — Direct/Cross/Redirect

FBI forensic accountant Paige Owens explained charts tracing transfers through accounts associated with Alameda, FTX Digital Markets, North Dimension, and several individuals to political recipients. Cross-examination addressed the government's selection of transactions, the limits of LIFO tracing, and the analysis's inability to identify the origins of incoming funds; redirect compared the dates of selected incoming and outgoing wires.

Direct
Paige Owens — Direct Paige Owens Thane Rehn
167 lines

FBI forensic accountant Paige Owens explained government-prepared charts tracing funds from Alameda Research, FTX Digital Markets, and North Dimension accounts through accounts associated with Samuel Bankman-Fried, Nishad Singh, and Ryan Salame to political contributions.

Cross
Paige Owens — Cross Paige Owens Christian R. Everdell
126 lines

Owens acknowledged that fund-tracing results depend on the chosen accounting method, attributed the identified VIEW PAC payment to Heller & Robbins after reviewing bank statements, and confirmed that she did not analyze the origin of funds entering Alameda or North Dimension accounts.

Redirect
Paige Owens — Redirect Paige Owens Thane Rehn
26 lines

Owens used Government Exhibit 1089 to identify selected incoming and outgoing wires occurring on the same dates, while the court sustained one form objection and overruled another.

Procedural
Government Exhibit 505 Evidentiary Ruling
18 lines

Highlights

← Day 10Federal Criminal TrialDay 12 →