The start of the next phase of the trial of the former head of the collapsed FTX cryptocurrency exchange, Sam Bankman-Fried (SBF), has not gone unnoticed. The prosecution, as previously anticipated, decided to call Caroline Ellison, former CEO of Alameda Research and SBF’s ex-girlfriend, as a witness.
Sentiments aside – Ellison exposes Sam Bankman-Fried’s
The relationship Caroline Ellison had with the accused began in the summer of 2020 and lasted for several years. Despite this, personal feelings did not prevent her from coming out strongly as the prosecution’s star witness, providing key information about the alleged diversion of FTX client funds by Sam Bankman-Fried through Alameda, which Ellison headed before her demise.
During her testimony, she confessed to committing the fraud along with the defendant, stressing that it was he himself who ordered her to carry out these crimes. Referring to her role in the entire case, she confirmed that Alameda (and herself) took “several billion dollars” from FTX clients, using the funds for investments.
It is worth noting that Ellison also confirmed that Bankman-Fried himself was the architect of the systems and ordered the trading company to move the funds. In addition to investing FTX customer funds, Alameda used some $14 million to pay off its creditors. For the benefit of potential lenders, the company’s balance sheets were also manipulated.
Customers were regularly deprived of their funds
The prosecution is using Ellison’s testimony to bring major charges against Sam Bankman-Fried. The first is the diversion of customer fiat deposits to a bank account linked to Alameda, which Ellison confirmed. She claimed that between 2021 and 2022, FTX received funds into Alameda’s bank accounts, and that the amount was between $10 billion and $20 billion.
Alameda used some of these deposits to repay loans, make investments and convert stablecoins, such as USDC, for a total of about $2 billion. However, this does not seem to be the end of the story, as the remaining funds were also on the move.
Bankman-Fried’s dictatorship
Bankman-Fried himself and his lawyers had previously tried to argue that SBF was not responsible for Alameda and had no control over the trading company’s operations after he stepped down as CEO. However, Ellison’s testimony refuted these claims, showing that her position and responsibilities did not change significantly, even after she took over as co-manager with Sam Trabucco. Ultimately, she was subordinate to the SBF and it was the SBF that could fire her.
Throughout Sam Bankman-Fried’s trial, seven charges were filed, including bank fraud against Alameda Research lenders and conspiracy to commit bank fraud against Alameda Research lenders. Ellison’s testimony is a key element in the prosecution’s effort to prove these crimes beyond a reasonable doubt. Her testimony, as someone with first-hand knowledge of the entire case, is a critical point in unraveling this convoluted process.
