Unchained

Latest Episodes:

The Chopping Block: Gabriel Shapiro on Why Sam Bankman-Fried May Be a ‘Sociopath’ - Ep. 555 Oct 12, 2023

Show notes

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and chop it up about the latest news. This week, the crew is joined by Gabriel Shapiro, general counsel at Delphi Labs, to talk about the key points in the criminal trial of Sam Bankman-Fried and his lackluster defense strategy so far. They also delve into Michael Lewis’ book and his depictions of SBF’s “lore and backstory,” and discuss how SBF’s “quirks of character” may have actually enticed investors.

Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, TuneIn, Amazon Music, or on your favorite podcast platform.

Show highlights:

How Haseeb's previous comments on Sam Bankman-Fried’s intentions "didn't age well" after developments in the trial
Why Gabriel believes that SBF is a "sociopath" and should have taken a plea deal if offered
Shortcomings in the defense’s strategy and why Gabriel believes they’re “grasping at straws”
How the fake numbers of FTX insurance fund highlight the weaknesses of a centralized exchange
Why Matt Huang, cofounder of VC firm Paradigm, agreed to testify in such a high-profile trial, and why Haseeb as a VC himself wouldn't have done it
Whether SBF understood the technical components of crypto and why he sounded like ChatGPT in his responses, according to Tarun
Whether VCs are to blame for investing in FTX or what lessons VCs need to take away from the SBF debacle.
The differences and similarities between SBF and Binance CEO Changpeng Zhao

Hosts

Haseeb Qureshi, managing partner at Dragonfly
Tom Schmidt, general partner at Dragonfly
Tarun Chitra, managing partner at Robot Ventures

Guest:

Gabriel Shapiro, General counsel of Delphi Labs
Previous appearances on Unchained:
Are DAOs Strong Enough to Survive the Regulators?
What Does Mango Markets Exploiter Avi Eisenberg’s Arrest in Puerto Rico Mean for DeFi?

Disclosures

Links

Previous coverage of the trial elsewhere:

NYT: What FTX’s Sam Bankman-Fried and J.P. Morgan Have in Common
Forbes: Sam Bankman-Fried Knew Plenty About His Alameda Research Hedge Fund–And Sent Details To Forbes Just Months Ago
Tarun's tweet on insurance funds being onchain

Learn more about your ad choices. Visit megaphone.fm/adchoices

SBF Trial, Day 6: Caroline Ellison Recalls 'The Worst Week of My Life Oct 12, 2023

Show notes

Day 6 of the SBF trial was marked by emotional testimony from Caroline Ellison, who shed tears as she detailed the financial chaos within Alameda and FTX. She also recounted dramatic incidents such as an alleged bribe by Alameda to a Chinese government official, creating accounts using the IDs of Thai prostitutes, and an attempt to raise money by selling FTX shares to a Saudi prince.

Ellison discussed the financial turmoil that began with the crypto market crash and how it led to desperate actions, allegedly directed by SBF. She revealed the manipulation of balance sheets, the use of FTX customer funds for risky investments, and the ethical compromises made to keep Alameda afloat.

The day also delved into the secretive culture within Alameda and FTX, highlighting the use of disappearing messages on Signal for sensitive discussions, and what was really happening behind the scenes as FTX began to implode.

Catch up on Unchained’s previous coverage:

Learn more about your ad choices. Visit megaphone.fm/adchoices

SBF Trial, Day 5: SBF's Defense Finally Found Its Legs, But Can It Counter Caroline Ellison? Oct 11, 2023

Show notes

Caroline Ellison, former CEO of Alameda Research and SBF's ex-partner, took the stand to reveal the alleged financial mismanagement at Alameda and FTX, which she claimed was at Bankman-Fried’s direction. The cross examination of Gary Wang finally began to show how SBF’s lawyers plan to defend him, though Wang largely appeared to be a yes man who simply trusted and followed his friend and co-founder.

Ellison's revelations included Alameda's hidden trading of FTT to prop up its price, her warnings to SBF about Alameda’s inability to pay back its lenders if he put billions more into venture investments, and his views on risk and “expected value.” For instance, she claimed he said if, with a coin toss came up tails and would mean Earth’s destruction, he would toss the coin if there it was twice as likely that it would more than double prosperity on Earth. However, her testimony seemed designed to preemptively rebut the defense’s potential argument that Alameda needed to borrow customer funds because she had not hedged.

Catch up on Unchained’s previous coverage:

Learn more about your ad choices. Visit megaphone.fm/adchoices

SBF’s Lawyers Could Be Annoying the Judge. How Might That Impact the Trial? - Ep. 554 Oct 09, 2023

Show notes

The first week of the criminal trial of former FTX CEO Sam Bankman-Fried has come to a close, with his former friends and FTX colleagues Adam Yedidia and Gary Wang delivering powerful testimonies that are forming the foundations for the prosecution’s arguments — arguments that the defense may have a difficult time surmounting. Sam Enzer, partner at Cahill Gordon & Reindel, and Brian Klein, partner at Waymaker, discuss Alameda’s special privileges coded into the FTX software, the reason why a scorched FTX customer may have been chosen as the first witness, and why upcoming key witnesses are going to be a “real problem” for the defense.

Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, Amazon Music, or your favorite podcast platform.

Show highlights:

What we learned about the prosecution and defenses strategies after the first week of the trial
How the jury being mostly professionals may impact deliberations
Why Brian believes someone “out of the mainstream” would make an ideal juror for the defense
Why Sam believes the defense’s opening was stronger than the prosecution’s
Which arguments may be the most difficult for Sam Bankman-Fried's lawyers to defend
Why the defense’s “building a plane as you’re flying” analogy may come back to hurt them in closing
Why Sam believes the order of the witness testimony so far is helping the prosecution build the foundation of its case
Whether Adam Yedidia’s testimony was effective at establishing him as a credible witness
Whether the fact that some witnesses are cooperating to avoid jail time will impact the jury’s decision
What Gary Wang, former CTO of FTX, revealed about Alameda's special privileges coded into FTX software and how it wasn’t an “oversight”
Whether Judge Kaplan is growing impatient with the defense
Whether the prosecution's objections were sustained reasonably by Judge Kaplan
Why upcoming insider witnesses pose a “real problem” to the defense
Why it's "not even an open question" that the defense team will appeal if they lose the case

Thank you to our sponsors!

Guest:

Sam Enzer, partner at Cahill Gordon & Reindel.
Previous appearance on Unchained: SBF Trial: How Sam Bankman-Fried’s Lawyers Might Try and Win His Case
Brian Klein, partner at Waymaker
Previous appearance on Unchained: SBF Behind Bars: Why Revoked Bail Is a Big Deal for Crypto’s Biggest Trial

Links

Learn more about your ad choices. Visit megaphone.fm/adchoices

SBF Trial, Day 4: SBF's Lawyers Annoy Judge Kaplan, While Wang Reveals Alameda’s Special Privileges Oct 07, 2023

Show notes

Laura reports on the testimony of Gary Wang on Thursday, who described Alameda’s special privileges that were programmed into FTX’s code as early as July 2019, a few months after the exchange launched.

These privileges included Alameda’s ability to have a negative balance on its FTX account. This meant that Alameda was able to transfer and withdraw more funds than it had, essentially “borrowing from the exchange.” Those funds, Wang said, belonged to FTX customers, and at the time that FTX declared bankruptcy, Alameda had borrowed $8 billion from the exchange.

Wang said Alameda had a $65 billion line of credit — far higher than any other customer on the exchange. He also revealed details about FTT, the cryptocurrency that FTX had created, and the concerns that were raised about how the tokens were allegedly used to boost Alameda’s balance on the site.

If you need to catch up, don’t miss our recent coverage on the trial:

Learn more about your ad choices. Visit megaphone.fm/adchoices

Did Sam Bankman-Fried Have Intent to Defraud FTX Investors? - Ep. 553 Oct 06, 2023

Show notes

The blockbuster trial of Sam Bankman-Fried wrapped up its third day, with multiple witnesses, including former FTX software developer Adam Yedidia, Paradigm co-founder Matt Huang, and FTX cofounder Gary Wang, taking the witness stand. Joshua Ashley Klayman, Senior Counsel, U.S. Head of FinTech and Head of Blockchain & Digital Assets at Linklaters, discusses the main takeaways from the trial so far, the surprising testimonies given by former close associates of SBF, and how the prosecution and defense plan to paint a picture of who SBF is to the jury.

Show highlights:

What Josh's biggest takeaways from the trial are so far
Why Josh felt that the jury had “a lot to take in” in order to understand the basics of the case
Whether the different backgrounds of the jury will affect the outcome of the trial
Why the prosecution is arguing that regardless of the technical aspects of the case, the key issue is fraud
How the defense plans to argue that SBF did not intend to defraud investors
Why the selection of the first witness, a former FTX customer, is an "interesting" choice, according to Josh
What is the fiat@ftx.com account and how it contributed to FTX’s undoing
How they discovered the $8 billion hole in the FTX balance sheet and SBF's reaction at the time
What an email revealed about the lack of corporate governance in FTX and Alameda

Thank you to our sponsors!

Guest

Joshua Ashley Klayman, Senior Counsel, U.S. Head of FinTech and Head of Blockchain & Digital Assets at Linklaters
Previous appearances on Unchained:
Gary Gensler vs. Crypto: What Will the SEC Attack Next?
How Crypto And Blockchain Technology Should Be Regulated

Links

Learn more about your ad choices. Visit megaphone.fm/adchoices

SBF Trial, Day 3: Why a True Believer in FTX Flipped Once He Learned One Fact Oct 06, 2023

Show notes

Laura reports on the testimony of three witnesses on Thursday, including one who declared that “FTX defrauded all of its customers” and another stating that he had committed financial crimes at the direction of Sam Bankman-Fried.

Former FTX software developer Adam Yedidia, Paradigm co-founder Matt Huang, and FTX and Alameda co-founder Gary Wang filled in the details of different aspects of FTX and Alameda’s business. Huang’s testimony detailed how Paradigm expressed concern about FTX’s lack of corporate controls and how the company was “owned and controlled by Sam.” Wang has only started his testimony but has already said he implemented advantages for Alameda into FTX’s code at Bankman-Fried’s direction.

Yedidia’s account had the most emotional details, describing how he had a strong belief in the company, to the point where, when employees began leaving FTX, he had messaged Bankman-Fried that he loved him and wasn’t going anywhere, but that it flipped once he realized “FTX defrauded all of its customers.” Find out what new information caused him to have a change of heart in this episode.

If you need to catch up, don’t miss our recent coverage on the trial:

Learn more about your ad choices. Visit megaphone.fm/adchoices

SBF Trial, Day 2: DOJ: Sam Bankman-Fried ‘Lied’ His Way to ‘Wealth, Power, and Influence’ Oct 05, 2023

Show notes

Laura reports on the opening statements of the prosecution and defense, which painted a portrait of Sam Bankman-Fried as power-hungry and discussed how he allegedly managed to fumble customer funds.

Next witnesses are set to include Matt Huang, cofounder and managing partner at crypto VC firm Paradigm, and Gary Wang, former CTO of FTX.

Tune in to get the latest updates and insights on a case that could have far-reaching implications for the crypto industry.

If you need to catch up, don’t miss our recent coverage on the trial:

Learn more about your ad choices. Visit megaphone.fm/adchoices

The Chopping Block: Michael Lewis Swindled, SBF’s Effective Altruism Ruse, Ethereum Protocol Enshrinement - Ep. 552 Oct 04, 2023

Show notes

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest news. This week, they discuss the wildest claims in Michael Lewis’ new book on Sam Bankman-Fried, debate whether SBF’s effective altruism was ever genuine, and whether Ethereum should enshrine more features onto its protocol.

Show highlights:

Michael Lewis’ interview on “60 Minutes” and the wildest claims in his new book
Whether SBF would have paid Donald Trump $5 billion not to run for president
Why Lewis characterizing FTX’s downfall as a bank run is misleading
Whether FTX executives, in the moment of the collapse, fled to their parents’ homes
Was SBF genuine in his belief in effective altruism or was it clever branding
Whether we will still be talking about the SBF trial years down the line
The debate on whether Ethereum should enshrine more features onto its core protocol
Whether Lido poses a centralization risk to the Ethereum ecosystem
Predictions on how the SBF trial will play out and whether SBF has a trick up his sleeve

Hosts

Haseeb Qureshi, managing partner at Dragonfly
Robert Leshner, founder of Compound
Tom Schmidt, general partner at Dragonfly
Tarun Chitra, managing partner at Robot Ventures

Disclosures

Links

SBF’s trial:

Protocol enshrinement:

Others:

Cryptoslate: Terra's Do Kwon and Daniel Shin conspired to falsify transactions, chat logs show

Learn more about your ad choices. Visit megaphone.fm/adchoices

SBF Trial, Day 1: Possible Witnesses Include FTX Insiders, Big Names in Crypto, and SBF’s Family Oct 04, 2023

Show notes

Laura reports on a noticeably composed Bankman-Fried and delves into the jury de-selection process, revealing potential jurors with surprising crypto ties. The government's stance on a plea deal is finally clarified, and a long list of potential witnesses from the crypto world is unveiled.

Tune in to get the latest updates and insights on a case that could have far-reaching implications for the crypto industry.

If you need to catch up, don’t miss our recent coverage on the trial:

Learn more about your ad choices. Visit megaphone.fm/adchoices