Star witness Caroline Ellison, a former business partner and ex-girlfriend of Sam Bankman-Fried, took the stand in a high-stakes trial this Tuesday. The former CEO of Alameda Research accused Bankman-Fried of orchestrating fraud and money laundering schemes that led to the collapse of his cryptocurrency empire, FTX.
Bankman-Fried a Key Figure in Decisions Made
Ellison, 28, testified that as the once-CEO of Alameda Research, a cryptocurrency company founded by Bankman-Fried, she was not acting alone in committing these crimes. She claimed that they were loyal to Bankman-Fried, who had set up a system allowing Alameda to siphon money from FTX customer accounts.
Ellison detailed how her romantic relationship with Bankman-Fried began in 2018 and how he harbored ambitious dreams, including a 5% chance of becoming president. Despite living together, their relationship remained private to colleagues, and Ellison felt overlooked.
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Ellison Seeking a Lighter Sentence by Cooperating
Bankman-Fried’s actions, including leaking Ellison’s private writings to the New York Times, resulted in his imprisonment. Ellison, who has pleaded guilty to seven counts, is cooperating in the hope of a lighter sentence, potentially facing more than 100 years in prison.
Ellison revealed the deep connection between Alameda and FTX, with Bankman-Fried’s central role in it. She asserted that even if Bankman-Fried held the position of Alameda’s CEO, the ultimate responsibility rested with her.
Prosecution’s Case Unfolds
This testimony by Ellison provides critical insight into the unraveling of the multi-billion-dollar cryptocurrency empire in the past year. It is a cornerstone of the prosecution’s case, alleging that Bankman-Fried masterminded a scheme to misappropriate billions from FTX’s customer accounts. This, despite his repeated claims that FTX and Alameda operated independently.
Cooperation for Leniency
Ellison, along with FTX co-founder Gary Wong and other former employees, is cooperating with authorities in exchange for the potential of reduced sentences. She acknowledged her wrongdoing, admitting that Alameda had access to extensive lending facilities at FTX. Ellison also admitted to consipriing to conceal the connection between the two companies from investors and customers.
