Day 8 - October 13, 2023

In a robing-room discussion, defense counsel said Bankman-Fried's early-morning Adderall dose wore off before the court day and that efforts to obtain a lunchtime dose had been unsuccessful. The prosecution reported that the BOP had approved an extended-release dose for administration at 6 a.m. and hoped to begin the arrangement Monday. The court directed the prosecution to report whether that occurred. Zac Prince testified that BlockFi's lending to Alameda grew from approximately $50 million in May 2021 to approximately $1.1 billion in May 2022. He said Alameda provided unaudited balance sheets, wallet information, and mostly FTT collateral, met margin calls, and fully repaid loans recalled during the May and June 2022 market turmoil. Prince reviewed Alameda balance sheets and a BlockFi credit memo whose stress tests projected positive equity even if FTT and Serum fell to zero. He testified that materially greater liabilities could have changed BlockFi's lending decisions and that BlockFi did not know of Alameda borrowing from FTX, loans to company executives, or any use of customer money. He said approximately $650 million in Alameda loans and $350 million in assets held on FTX were ultimately impaired, leading BlockFi toward bankruptcy. On cross-examination, Prince acknowledged BlockFi's concerns about wrong-way risk, volatility, liquidity, unaudited financials, and credit limits. He explained that exceptions could receive executive and board-level approval, but said BlockFi did not make the particular loan opposed in one credit memo and distinguished it from later loans made with higher collateral requirements. The court admitted defense exhibits with an instruction that information attributed to Alameda could not be considered for its truth. On redirect and recross, Prince clarified that BlockFi's bankruptcy assessment involved both the Alameda loans and inaccessible FTX assets, and he declined to characterize the Alameda loans as the sole cause.