Caroline Ellison, Alameda’s former Chief Executive
Officer, is expected to take the stand today (Thursday) to testify against Sam
Bankman-Fried (SBF) for the third day. In her previous testimony, she revealed
cases of deceit and fraud at FTX before the exchange collapsed.
As the courtroom witnessed the proceedings, Ellison
recounted the ups and downs during the final days of FTX and Alameda Research.
According to a report by the Financial Times, in a text exchange with SBF just
days before the exchange’s bankruptcy filing, Ellison expressed relief, saying
that it felt great to get it over one way or another.
Ellison, who had a complex history with her former
boss, has pleaded guilty to fraud, and now, she serves as the star witness in
the trial against SBF. In her testimony, the demise of FTX signaled the end of
Alameda’s secret dealings, which included betting with $10 billion of FTX
customer funds.
Her testimony delved deeper into the situation at
the crypto exchange. She explained the content of a document that SBF had
written, outlining FTX’s options as it grappled with the impending collapse.
Names like Dustin Moskovitz, the Co-Founder of Facebook, and Pete Briger of
Fortress Investment Group were listed as potential saviors of the exchange.
Both Moskovitz and SBF were known for their commitment to effective altruism.
However, SBF’s efforts to secure a bailout failed.
FTX’s downfall became inevitable when a surge in
customer withdrawals exposed a multibillion-dollar deficit in its balance
sheet, partly fueled by undisclosed lending to Alameda. Ellison disclosed that she
had been ordered to create multiple “alternative” balance sheets for
Alameda Research, some of which concealed substantial kickbacks to FTX’s
executives, and that Alameda had “borrowed $10 billion from FTX’s
customers.”
Ex-Alameda CEO Caroline Ellison testifies at Sam Bankman-Fried trial https://t.co/0wboKiEbOG
— Financial Times (@FT) October 10, 2023
Besides that, Ellison implicated SBF in bribery. She
stated that in 2021, he ordered a payment of $150 million to officials in an
attempt to release approximately $1 billion in funds frozen on two Chinese
crypto exchanges due to a money laundering investigation. When attempts to
address the issue by trading through accounts in the name of “Thai
prostitutes” failed, SBF allegedly shouted down a colleague who raised
objections, the FT reported.
Shedding Light on Alameda’s Financial Turmoil
During cross-examination, Ellison defended her
position by stating that while she “absolutely could and should” have
implemented hedges earlier in the year, the fundamental issue was SBF’s
decision to make a series of investments that left Alameda in an unstable
financial state. She asserted that these investments involved borrowing
billions of dollars through open-term loans, which were used for illiquid
ventures, a move she had disagreed with.
Her testimony showed her personal and professional
relationship with SBF, including the immense pressure and emotional turmoil it
had caused her. She recounted a heated conversation in August 2022, during
which SBF blamed her for Alameda’s financial troubles.
Caroline Ellison, Alameda’s former Chief Executive
Officer, is expected to take the stand today (Thursday) to testify against Sam
Bankman-Fried (SBF) for the third day. In her previous testimony, she revealed
cases of deceit and fraud at FTX before the exchange collapsed.
As the courtroom witnessed the proceedings, Ellison
recounted the ups and downs during the final days of FTX and Alameda Research.
According to a report by the Financial Times, in a text exchange with SBF just
days before the exchange’s bankruptcy filing, Ellison expressed relief, saying
that it felt great to get it over one way or another.
Ellison, who had a complex history with her former
boss, has pleaded guilty to fraud, and now, she serves as the star witness in
the trial against SBF. In her testimony, the demise of FTX signaled the end of
Alameda’s secret dealings, which included betting with $10 billion of FTX
customer funds.
Her testimony delved deeper into the situation at
the crypto exchange. She explained the content of a document that SBF had
written, outlining FTX’s options as it grappled with the impending collapse.
Names like Dustin Moskovitz, the Co-Founder of Facebook, and Pete Briger of
Fortress Investment Group were listed as potential saviors of the exchange.
Both Moskovitz and SBF were known for their commitment to effective altruism.
However, SBF’s efforts to secure a bailout failed.
FTX’s downfall became inevitable when a surge in
customer withdrawals exposed a multibillion-dollar deficit in its balance
sheet, partly fueled by undisclosed lending to Alameda. Ellison disclosed that she
had been ordered to create multiple “alternative” balance sheets for
Alameda Research, some of which concealed substantial kickbacks to FTX’s
executives, and that Alameda had “borrowed $10 billion from FTX’s
customers.”
Ex-Alameda CEO Caroline Ellison testifies at Sam Bankman-Fried trial https://t.co/0wboKiEbOG
— Financial Times (@FT) October 10, 2023
Besides that, Ellison implicated SBF in bribery. She
stated that in 2021, he ordered a payment of $150 million to officials in an
attempt to release approximately $1 billion in funds frozen on two Chinese
crypto exchanges due to a money laundering investigation. When attempts to
address the issue by trading through accounts in the name of “Thai
prostitutes” failed, SBF allegedly shouted down a colleague who raised
objections, the FT reported.
Shedding Light on Alameda’s Financial Turmoil
During cross-examination, Ellison defended her
position by stating that while she “absolutely could and should” have
implemented hedges earlier in the year, the fundamental issue was SBF’s
decision to make a series of investments that left Alameda in an unstable
financial state. She asserted that these investments involved borrowing
billions of dollars through open-term loans, which were used for illiquid
ventures, a move she had disagreed with.
Her testimony showed her personal and professional
relationship with SBF, including the immense pressure and emotional turmoil it
had caused her. She recounted a heated conversation in August 2022, during
which SBF blamed her for Alameda’s financial troubles.
