Caroline Ellison, the former CEO of Sam Bankman-Fried
(SBF)’s hedge fund, Alameda Research, has testified that the crypto mogul
directed a scheme to defraud customers of his cryptocurrency exchange, FTX.
Ellison’s allegations painted a picture of ambition, deception, and misuse of
customer funds by SBF.
According to a report by Reuters, the former executive
provided a detailed account of how an estimated $10 billion of FTX customer
funds were allegedly misappropriated to repay debts and make investments. This
move, according to Ellison, was orchestrated by SBF, who had set up systems
allowing Alameda Research to access customer funds while directing the operation.
The trial centered on the prosecution’s assertion that
Alameda Research misappropriated billions of dollars from FTX’s customers,
leading to its collapse in November 2022. Ellison, who has already pled guilty
to fraud and conspiracy charges, has emerged as a central figure, providing
firsthand accounts of her involvement in these activities under the direction
of SBF.
However, SBF maintains his innocence, arguing that any
financial discrepancies were a result of errors and not deliberate attempts to
steal funds. Moreover, Ellison disclosed that she had no equity stake in
Alameda Research despite expressing interest in it, according to a report by
Coindesk. SBF reportedly believed that it would be too complicated to
intertwine her with Alameda Research’s ownership, emphasizing the importance of keeping
Alameda Research and FTX separate in the public eye.
Ellison’s testimony highlighted Sam SBF‘s
inclination toward borrowing substantial sums of money for Alameda Research’s
operations. She claimed that SBF directed her and others to secure
huge loans. This intense borrowing strategy played a pivotal role in Alameda Research’s
financial dealings.
Confessions of a Collaborative Crime
The witness also highlighted Alameda Research’s substantial line of
credit at FTX, a financial maneuver orchestrated by SBF. The complexities of
using FTX’s native token, FTT, as collateral for loans were revealed in detail,
adding another layer to the financial intricacies of the case.
Ellison’s testimony commenced with a moment of suspense when
she had to search the courtroom for nearly 30 seconds before identifying Sam
SBF, CNBC reported. The tension in the room was noticeable as she
eventually pointed out the defendant, describing him as sitting “over
there and wearing a suit.” This identification set…
