SBF’s Ex-Girlfriend Takes Stand, Struggles to Identify Him

Caroline Ellison, the former CEO of Alameda Research and SBF's ex-girlfriend testified against him in a New York court yesterday, while struggling to identify him in the courtroom.
sbf's ex-girlfriend

Caroline Ellison, the former CEO of Alameda Research and SBF’s ex-girlfriend testified against him in a New York court yesterday, while struggling to identify him in the courtroom.

Caroline Ellison sbf's ex-girlfriend
Caroline Ellison former CEO of Alameda Research and SBF’s ex-girlfriend at Federal Court in New York City — Image: REUTERS/Cheney Orr

The Testimony

Caroline Ellison testified in court that she was instructed by Sam Bankman-Fried to engage in activities that ultimately contributed to the downfall of the digital asset exchange FTX.

In his capacity as the former leader of Alameda Research, Mr. Bankman-Fried, who is 28 years old, is accused of having a significant role in the operation.

Ellison admitted her guilt in December, stating in court, “I was aware that it was morally incorrect.” From a courthouse located in downtown Manhattan, Ellison proceeded to list her offenses, which included “fraud, conspiracy to commit fraud, and money laundering.”

SBF’s Ex-Girlfriend Struggled to Identify Him in Courtroom

During her testimony on Tuesday, Ellison revealed that she had initially crossed paths with Bankman-Fried while they were both employed at Jane Street Group and later became involved romantically.

However, when asked to identify Sam Bankman-Fried in the courtroom, she apparently struggled to do so. She reportedly scanned the room, looking from one side to the other, taking approximately 30 seconds to finally point him out, mentioning that he was seated “over there, wearing a suit.”

Caroline Ellison, former CEO of Alameda Research, testified in court, claiming that Sam Bankman-Fried directed her to commit crimes, which included diverting several billion dollars from FTX customers to Alameda and using it for investments and to repay lenders.

Ellison’s testimony came after FTX’s co-founder Gary Wang. He testified as a key witness in the government’s case against Bankman-Fried, who is accused of orchestrating a fraudulent scheme leading to the bankruptcies of both companies.

Related reading: FTX Co-Founder Gary Wang’s Testimony Drives Extra Nails in SBF’s Coffin

Prosecutors believe Ellison possesses crucial information about the alleged siphoning of FTX customer funds to Alameda. She previously agreed to cooperate with federal prosecutors after FTX’s collapse. This revelation adds a significant dimension to the ongoing legal battle surrounding these digital assets firms and their former leader.

The Downfall of FTX

FTX, once a major global digital asset trading platform, declared bankruptcy in November with over $8 billion reportedly missing. Prosecutors claim that its downfall occurred because Sam Bankman-Fried allegedly misappropriated billions in customer funds through Alameda, which had an account with the exchange, allowing unlimited withdrawals.

According to a report by CBS News, these funds were purportedly used for property purchases, political donations, and to support Alameda’s risky digital asset investments that ran into trouble in 2022.

When Alameda faced creditor demands, it’s alleged that Bankman-Fried instructed Caroline Ellison to tap into FTX customer funds to settle the debts.

Ellison, having admitted to various charges, including concealing the relationship between the two firms, hopes for a reduced sentence.

Using Customer Funds to Pay Back Loans

Caroline Ellison testified that Alameda Research took several billion dollars from FTX customers under the direction of Sam Bankman-Fried. She revealed that Bankman-Fried had established a system to misappropriate these funds and instructed her and others to use customer funds to repay loans totaling around $10 billion.

Ellison admitted to taking approximately $14 billion in total, some of which was eventually repaid. She further disclosed that, at Bankman-Fried’s direction, she provided lenders with inaccurate balance sheets for Alameda, making the firm appear less risky as an investment.

Ellison stated that upon joining Alameda, she discovered that the firm was in a much worse financial state than she had expected, experiencing significant losses, lender withdrawals, and employee departures.

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