In highly anticipated testimony, former Alameda Research CEO Caroline Ellison told a packed courtroom on Tuesday that her onetime boss Sam Bankman-Fried directed her to the commit the crimes that eventually led to the downfall of the crypto empire they helmed.
After entering the courtroom, it took Ellison a full 30 seconds to point out Bankman-Fried. She’s kept a low profile since the collapse of the FTX crypto exchange and sister trading firm, but she spoke clearly and loudly to the court, wearing a grey suit over a pale red dress and black tights.
Ellison said Alameda had access to customer deposits through an unlimited line of credit, along with direct access to customer deposits that were sent to Alameda’s bank account known as “fiat@”. She also admitted to sending balance sheets to banks at Bankman-Fried’s direction that made Alameda’s position look less risky than it really was.
She and also Bankman-Fried used to date for a “couple of years,” she told the court before it broke for lunch. Ellison is expected to continue testifying and to talk about her activity as CEO of Alameda, specifically as to what she did when Bankman-Fried directed her to hedge Alameda’s bets at the beginning of 2021.
Later, Ellison was asked about Bankman-Fried’s ambitions. Ellison said that the former billionaire replied that he would be president of the U.S., according to Inner City Press.
Ellison pled guilty in December to seven charges of fraud including two counts of conspiracy to commit wire fraud, two counts of actual wire fraud, one count of conspiracy to commit commodities fraud, one count of conspiracy to commit securities fraud and one count of conspiracy to commit money laundering.
Bankman-Fried’s trial began its second week on Tuesday with resumed testimony from FTX co-founder Gary Wang.
The former FTX CEO faces decades in prison if he is convicted on a slew of charges, including fraud, over allegations that he and other FTX executives used billions of customer assets to make their own failed investments. FTX filed for bankruptcy protection late last year.
Updated at 2:30 p.m. ET to include details about Ellison’s testimony
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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