As the trial against Sam Bankman-Fried goes into thesecond week, one significant testimony was much anticipated. On Tuesday local time, Caroline Ellison, the former girlfriend of SBF testified in front of the court in New York. In one of the most high-profile trials the crypto world has witnessed to date, Bankman-Fried faces several fraud-related charges.
High Flying Ambitions
While Ellison and Bankman-Fried were an on and off couple during her time at Alameda, she claimed that they broke up in 2020. According to earlier reports, they resumed the relationship again, to finally break up in early 2022.
SBF had appointed Ellison as CEO of Alameda and paid her an annual salary of US $200,000 ($311,000), while bonuses reached up to US $20 million ($31 million).
During Tuesday’s hearing, Ellison disclosed that Bankman-Fried had shared his ambitions with her, expressing his desire to become the President of the United States.
Ellison: We started sleeping together on and off in the summer of 2020. We dated and broke up.
AUSA: What did the defendant tell you about his ambitions?
Ellison: That he would be President.
AUSA: Of what?
Ellison: The United States.
— Inner City Press (@innercitypress) October 10, 2023
Ellison had pleaded guilty to charges similar to those faced by SBF, allowing her to enter a plea bargain and subsequently testify against her former boss and lover.
Telling Revelations
While Ellison admitted to the fraud and conspiracy charges in 2022, she tried to point the finger at Bankman-Fried.
She claimed she was instructed to commit these crimes, often for the purpose of upholding appearances. Ellison stated, “I sent balance sheets at the direction of Sam that made Alameda’s balances look less risky to investors.”
Ellison alleged that SBF instructed her to use FTX customer funds to provide loans to SBF’s close friends. Additionally, she asserted that he used the money for political donations, telling her that this was benefiting his political aspirations.
According to Ellison, SBF told her, “The political donation strategy is highly effective, it offers very high returns in terms of political influence.”
Ellison also revealed that Alameda had the liberty to withdraw unlimited lines of credit, and she claimed to have been unaware of any limits or repayment requirements.
"I sent balance sheets at the direction of Sam that made Alameda's balances look less risky to investors," Caroline Ellison told the court in SBF's trial.@nikhileshDereports from the courthousehttps://t.co/NB2k43rZ7s
— CoinDesk (@CoinDesk) October 10, 2023
Borrowing as Much as Possible
Ellison revealed she was instructed to borrow heavily, “as much as possible,” she said. The money was subsequently used for investments, to give to donors and also to buy back more FTT, the FTX token.
The FTT tokens were subsequently added to the balance sheet and used as collateral for additional borrowing. SBF had directed Ellison not to discuss their FTT trading in the presence of others.
AUSA: What did the defendant tell you about FTT?
Ellison: That the one dollar threshold was important and that if it went below that we should start buying.
AUSA: Who was "we"?
Ellison: Alameda. Later FTT went up to $50
— Inner City Press (@innercitypress) October 10, 2023
