Caroline Ellison Says Bankman-Fried steered FTX deception, collapse | The Australian
The former CEO of Alameda Research, Caroline Ellison, testified in the trial of former FTX Chief Executive Sam Bankman-Fried, revealing that he directed her and others to defraud FTX exchange customers. Ellison, who had a prior relationship with Bankman-Fried, portrayed him as an ambitious individual willing to share misleading financial information with lenders. She stated that Alameda Research took approximately $10 billion in FTX customer funds to repay its debts and invest, facilitated through a $65 billion line of credit and FTX customer deposits into an Alameda bank account. This revelation implicates Bankman-Fried in setting up systems that allowed these actions.
Ellison’s testimony is crucial, as she is one of three former associates who have pleaded guilty to fraud charges and agreed to cooperate with the Manhattan U.S. Attorney’s office. Prosecutors allege that Bankman-Fried misappropriated billions of customer funds to support Alameda, purchase real estate, and donate to political campaigns before FTX’s bankruptcy in 2022. Bankman-Fried has pleaded not guilty and contended that he never intended to steal funds.
In her testimony, Ellison also disclosed Bankman-Fried’s concerns about rival exchange Binance and his use of customer funds to buy back an equity stake. Furthermore, she revealed his presidential aspirations and belief in the influence of political donations. This trial could last up to six weeks and is expected to involve more cooperating witnesses.