Caroline Ellison had met SBF at their former job at Jane Street Capital, where SBF had convinced her to leave and join his new crypto firm.
Caroline Ellison, Former girlfriend of Sam “SBF” Bankman-Fried, took the stand on Tuesday to testify against her former boss and associate.
In her testimony, she alleged that SBF, who is on trial for stealing billions from customers of the FTX crypto exchange, was responsible for syphoning money through the Alameda Research backdoor.
Caroline Ellison testifies
On Tuesday, October 10, the former head of Alameda Research, Bankman-Fried’s crypto trading firm, began testifying about the role she played in the fall of FTX.
Ellison appeared in the US District Court in Manhattan shortly after 12:30pm and was sworn in as Judge Lewis Kaplan looked on.
Caroline Ellison had met SBF at their former job at the Jane Street Capital, where SBF had convinced her to leave and join his crypto firm.
Assistant US Attorney Danielle Sasson asked Ellison if she had committed any offence while working with Alameda, Ellison said, “Yes we did.”
“Sam and I and others,” she added.
“Fraud, conspiracy to commit fraud and money laundering,” she further clarified.
She placed the blame of the stolen FTX fund on her former boss when questioned about Alameda taking roughly $14B from the exchange.
She said, “He was the head of Alameda then FTX. He directed me to commit these crimes. Alameda took several billions of dollars from FTX customers and used it for investments. I sent balance sheets that made Alameda look less risky than it was.”
The relationship between the duo is an important element in the case against Bankman-Fried as he was the head of the exchange, while she managed Alameda Research.
Just last week, Gary Wang, FTX’s former chief technology officer testified that the company had a backdoor that allowed Alameda Research to have a negative balance of $8B. He noted that there was a code loophole that allowed for the crypto trading arm of FTX commingle customer funds, which was used for purchases, acquiring assets, and making donations to political campaigns.
As part of a deal with US authorities in exchange for her evidence, Ellison and Wang were among the first FTX and Alameda insiders to enter guilty pleas.
According to documents and her own writings that Mr. Bankman-Fried shared with the New York Times over the summer, Ellison’s narrative is likely to be tainted by her on-and-off romantic involvement with Mr. Bankman-Fried, which was a source of stress for both parties.
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