Sam Bankman-Fried’s ex-girlfriend, Caroline Ellison, accused the former cryptocurrency superstar of breaking the law at his behest in the first minutes of Tuesday’s trial.
• Also Read: Sam Bankman-Fried’s dangerous financial maneuvers were exposed at the inquest
“He was the owner of Alameda and the owner of Alameda and he gave me instructions to commit these crimes,” said Carolyn Ellison.
The accused, a graduate in mathematics from Stanford University, was named as the head of the hedge fund Alameda Research, whose operations were unbeknownst to them largely funded by money from clients of the cryptocurrency exchange platform FTX.
Co-founded by Sam Bankman-Fried in 2019, FTX filed for bankruptcy in November 2022 after learning that many of its customers had used their funds this way, trying to get their stake back. After the bankruptcy, some eight billion dollars were lost.
Sam Bankman-Fried allegedly set up this system of communicating ships between FTX and Alameda, hiding from the platform’s clients, investors and creditors.
Alameda pumped a total of $14 billion from FTX accounts, Carolyn Ellison, who testified at the hearing, indicated that she had been in a relationship with “SBF” for “about two years.”
“Alameda took billions of dollars to make investments and repay debts,” she explained, suggesting that in addition to FTX customers, platform investors and Alameda’s creditors were misled about the financial condition of both companies.
The 28-year-old pleaded guilty to seven counts in December and agreed to cooperate with Manhattan federal prosecutor Damian Williams. She agreed to testify at Sam Bankman-Fried’s trial and, in return, received a reduced sentence that has yet to be pronounced.
When Daniel Sassoon, an assistant federal prosecutor in Manhattan, questioned her about the facts she was accused of, she cited “fraud, criminal conspiracy to defraud and money laundering.”
Since the bankruptcy, “SBF” has regularly accused Carolyn Ellison of deficiencies and negligence in Alameda’s management.
In the final months before FTX’s failure he assured that he would no longer follow the day-to-day operations or the financial situation of Alameda, although he was still the majority shareholder, dependent on his employer.
But during Friday’s hearing, FTX co-founder Zixiao “Gary” Wang claimed that Sam Bankman-Fried continued to closely monitor Almeda’s operations until the bankruptcy filing.
Carolyn Ellison assured that “he was the one who set up the system” that made it possible for FTX to obtain funds from clients.
Tuesday morning began with cross-examination by Gary Wong’s defense, who was not in trouble. “SBF” lawyers specifically insisted on the cooperation of this former technical manager of FTX with the authorities.
Charged with seven felonies, Sam Bankman-Fried faces more than 100 years in prison if convicted.