Key Takeaways
- Pimbley to present evidence that the majority of balances for accounts not tied with FTX and Alameda users are concentrated in USD, BTC, ETH, and USDT
- Pimbley’s testimony is expected to challenge witness claim that Alameda had an “essentially unlimited line of credit on FTX”.
In the high-stakes trial of former FTX CEO Sam Bankman-Fried, his defense team is set to introduce an expert witness, Joseph Pimbley, to counter the testimony of key witnesses regarding the financial ties between FTX and the trading firm Alameda Research.
The case revolves around allegations of fraud and money laundering related to $8 billion in missing FTX customer deposits.
Joseph Pimbley, a member of the litigation consulting firm PF2 Securities, will play a pivotal role in offering a different perspective on the extent of Alameda Research’s line of credit with FTX. Bankman-Fried’s attorneys have asserted that Pimbley’s testimony, based on data extracted from FTX’s database, will shed light on critical aspects of the case.
Pimbley’s testimony will highlight that Alameda Research’s line of credit with FTX fluctuated between approximately $1 billion and $3 billion between October 2021 and September 2022, with a notable decrease in June 2022. This information aims to establish a clear timeline for the line of credit, potentially challenging previous claims made during the trial.
Furthermore, Pimbley will present evidence that the majority of balances for accounts not associated with FTX and Alameda users are concentrated in just four cryptocurrencies: USD, BTC (Bitcoin), ETH (Ethereum), and USDT (Tether).
Astonishingly, over 75% of these non-FTX and non-Alameda user balances are tied to accounts that have spot margin enabled, spot margin lending enabled, or show futures activity. This data may provide essential context for the testimony offered by former FTX executives.
Pimbley’s inclusion as an expert witness was not without controversy. Initially rejected by Judge Lewis Kaplan overseeing the case, the defense was allowed to re-nominate Pimbley and other prospects as witnesses after providing more specifics about their intended testimony.
The defense’s move to present Pimbley as an expert witness is also a direct response to the testimony offered by key witnesses, including former Alameda Research CEO Caroline Ellison, FTX co-founder Gary Wang, former FTX engineering director Nishad Singh, and former FTX employee Adam Yedidia.
These witnesses had previously made statements regarding Alameda’s line of credit and FTX customer use of margin trading, which the defense aims to dispute.
Pimbley’s testimony is expected to challenge Ellison’s claim that Alameda had an “essentially unlimited line of credit on FTX” and Wang’s statement that the firm had borrowed “around $3 billion” from the credit line.
Pimbley’s 54-page disclosure includes various charts, spreadsheet excerpts, diagrams, and database queries extracted from FTX’s Amazon Web Services database, all related to the line of credit between Alameda and FTX from October 2021 to November 2022.
It’s worth noting that Pimbley is being compensated at a rate of $720 per hour, plus expenses, for his work as an expert witness. However, he has asserted that he has “no financial interest in the outcome of this case.”
Sam Bankman-Fried’s silence in court over the past three weeks will soon be followed by the government resting its case, which alleges that FTX customers couldn’t withdraw their money during the exchange’s final days in November 2022 as SBF had irresponsibly allowed his crypto trading fund, Alameda Research, to spend it.
