Topline
Caroline Ellison, the former CEO of failed hedge fund Alameda Research and ex-girlfriend of alleged crypto felon Sam Bankman-Fried, took the stand Tuesday in the dramatic moment yet of Bankman-Fried’s trial which could land the former billionaire decades of prison time.
Caroline Ellison arrives Tuesday at the New York courthouse.
Key Facts
Ellison, who helmed the Alameda firm which prosecutors allege illegally commingled customer funds from its sister crypto exchange FTX, said Bankman-Fried “is the one who set up the system to allow Alameda to take money,” according to reporters present in the Manhattan courtroom.
FTX’s then-CEO Bankman-Fried “directed” her to “commit these crimes” resulting in Alameda borrowing billions of dollars worth of FTX customer funds to cover a $14 billion loss, according to Ellison.
Ellison, who arrived at court in a blue baseball cap and red glasses, only testified for a few minutes before the court broke for lunch shortly before 1 p.m. EDT, with her appearance coming immediately after that of FTX cofounder Gary Wang.
Key Background
Ellison pleaded guilty in December to charges for her role in Alameda and FTX s alleged scheme in December. At the time, Ellison told authorities that she “knew” her actions were “wrong” and she and Bankman-Fried conspired to defraud FTX customers, agreeing to cooperate with the U.S.’ case against Bankman-Fried. The 28-year-old Ellison and the 31-year-old Bankman-Fried first crossed paths at the trading firm Jane Street, later sharing a penthouse with several other FTX and Alameda executives in the Bahamas. Long expected to serve as the prosecution’s star witness in its case against Bankman-Fried, Ellison actually indirectly caused Bankman-Fried to spend the final two months before his trial in jail after a judge ruled Bankman-Fried violated bail conditions by sharing the contents of her private musings with the New York Times.
Crucial Quote
“I would tell her to be less risk-averse and believe in herself more,” Ellison wrote about what she’d say to her younger self in a 2021 application for Forbes’ 30 Under 30 list.
This is a developing story and will be updated…