Emails, chat logs, code and a notebook: the mountain of FTX evidence

Fragments of computer code. More than six million pages of emails, Slack messages, and other digital documents. And a little black notebook, filled with handwritten observations.

For months, federal prosecutors building the criminal case against fallen cryptocurrency executive Sam Bankman-Fried have collected a vast and unusually diverse array of evidence. The documents include crypto transaction logs and encrypted group chats from Mr Bankman-Fried’s collapsed exchange, FTX, as well as strikingly personal reflections captured by a star witness in the case.

The mountain of evidence is among the largest ever gathered in a white-collar securities fraud case prosecuted by federal authorities in Manhattan, according to data provided by a person with knowledge of the matter. For example, in the 2004 securities fraud prosecution of Martha Stewart, prosecutors produced 525,000 pages of evidence for the defense team, but the number has increased significantly in recent years.

The diversity and growing volume of materials in the FTX case underline the legal challenges faced by Mr Bankman-Fried, 31, who is charged with 13 criminal counts, including allegations that he embezzled billions of dollars in client money, scammed and campaign finance violated laws. He has pleaded not guilty.

With the trial set for October, prosecutors have gathered evidence ranging from phones and laptops to the contents of Mr Bankman-Fried’s Google accounts, which amounted to 2.5 million pages alone. At a hearing in March, Nicolas Roos, a federal prosecutor investigating FTX, said the government had obtained a laptop filled with so much information that FBI technicians struggled to decipher it all.

“It’s a huge amount to sift through, and sometimes you find incredibly useful information,” said Moira Penza, a former federal prosecutor who is now in private practice. “It’s a real challenge.”

Usually, the evidence in a criminal case remains largely secret until just before the trial. But in the case of Mr Bankman-Fried, interviews and a review of recent court cases have provided the first glimpse of the peculiar set of documents collected by FTX prosecutors.

The investigation began in November, after the collapse of FTX rocked the crypto market. Almost as soon as the exchange fell through, prosecutors began collecting documents, sending subpoenas to FTX employees and seeking documents from the political campaigns that Mr. Bankman-Fried funded.

The requests were often broad. One person who was served with a subpoena said prosecutors wanted every document related to FTX and sent a group of data experts who spent days extracting the information from a range of devices.

While much of what prosecutors have collected is typical corporate fare, other material points to the unusual personal dynamics at FTX.

The black notebook, described as a diary, belonged to Mr. Bankman-Fried’s on-again, off-again girlfriend, Caroline Ellison, a former top lieutenant in his business empire, three people familiar with the matter said.

Ms Ellison, who was CEO of FTX’s sister company hedge fund Alameda Research, also recorded observations about Mr Bankman-Fried in a series of electronic documents that have been distributed to lawyers on the case, three people with knowledge of the case said. Two of the people sometimes said that Mrs. Ellison expressed personal and professional resentment towards Mr. Bankman-Fried.

Lawyers and representatives for Mr. Bankman-Fried and Ms. Ellison declined to comment or did not respond to requests for comment on the evidence in the case. A spokesperson for Manhattan federal prosecutors declined to comment on the discovery process.

Ms. Ellison is expected to be a crucial witness. She has pleaded guilty to charges of fraud along with two other top executives, Gary Wang and Nishad Singh, and has agreed to cooperate with prosecutors prosecuting Mr Bankman-Fried. In the days after FTX collapsed, she confessed to Alameda employees that she, Mr. Bankman-Fried, Mr. Wang and Mr. Singh had used money from FTX clients to fill holes in Alameda’s accounts. She also dated Mr. Bankman-Fried and lived with him in a penthouse in the Bahamas, where the exchange was based.

Any personal writings from her or other witnesses could be helpful to defense attorneys during cross-examination, Ms. Penza said.

“The biggest risk with an associate is that the defense can say she’s cooperating here to save herself from a long prison sentence,” she said. “But modern juries are unlikely to take the face value they testify because of a vendetta or a failed romance.”

Much of FTX’s business data, including emails, Slack messages and transaction logs, was held by Sullivan & Cromwell, the law firm that took control of the exchange after it declared bankruptcy.

In a recent filing, Mr Bankman-Fried’s lawyers argued that prosecutors had relied on Sullivan & Cromwell to act as their de facto agent in obtaining documents from the company. The lawyers claimed that by “outsourcing” this process to the company, prosecutors are avoiding their legal responsibility to turn over potentially useful evidence to Mr. Bankman Fried.

The detective work of Sullivan & Cromwell – which has filed bills totaling $55 million in bankruptcy court – is already proving to be beneficial to prosecutors. In a court case in January, Sullivan & Cromwell showed an excerpt from FTX’s underlying code base, featuring a feature that allowed Alameda to borrow virtually unlimited amounts of money from the exchange.

In an email to Sullivan & Cromwell’s lawyers that month, Mr. Roos to request FTX transaction logs for accounts owned by Mr. Bankman Fried, Mrs. Ellison, Mr. Wang, Mr. Singh and two other people, whose names were redacted, according to court records. He also looked for reports of a group chat on the encrypted messaging app Signal, titled “Donation Processing,” where FTX executives discussed campaign finance matters.

Prosecutors also seized direct evidence from executives in Mr Bankman-Fried’s job. Last month, the FBI executed a search warrant at the $4 million Maryland home of Ryan Salame, a senior FTX executive who donated tens of millions of dollars to Republican candidates, including George Santos, the recently indicted congressman from Long Island, N.Y.

The officers seized Mr Salame’s mobile phone, as well as a phone belonging to his girlfriend, Michelle Bond, a crypto lobbyist, two people with knowledge of the matter said. Ms. Bond unsuccessfully ran for Congress last year as a Republican in another Long Island district.

Throughout the year, prosecutors have turned their evidence over to Mr. Bankman-Fried’s attorneys, a process known as discovery.

At the March hearing, Mr. Roos gave a detailed update on the trial, explaining to the judge overseeing the case, Lewis A. Kaplan, that prosecutors had obtained four laptops, including the device so large it could proved difficult to analyse. That laptop belonged to Mr. Wang, two people in the know said.

Lawyers for Mr Wang, Mr Salame and Ms Bond did not respond to requests for comment.

Mr Roos also said the government had handed over nearly a million documents to the defense team obtained from witnesses and other third parties in the case.

“We produced 927,000,” he said. “So that leaves, quick math, maybe 110,000.”

“Read before bed,” Judge Kaplan replied.