Former Alameda CEO Caroline Ellison, a pivotal witness in the SBF trial, recently testified in a courtroom filled with tension and anticipation. Mincing no words, Ellison revealed that she had carried out fraudulent actions under the influence of her ex-boyfriend, who was also the founder of the FTX exchange at the time. The focal point of the case against SBF revolves around the transfer of billions of dollars from customer accounts at FTX to Alameda. This significant financial movement left Alameda with a substantial deficit in its balance sheet after the cryptocurrency markets took a downturn in 2022.
Appearing as a key witness for the government, Ellison was asked about her involvement in criminal activities and the individuals she collaborated with. In response, she confessed, “I sent balance sheets at the direction of SBF that made Alameda’s balances look less risky to investors.” She also admitted that Alameda had utilized funds from FTX for its own investments, following Bankman-Fried’s instructions to utilize FTX funds while also ensuring that a portion of the money remained within FTX to fulfill customer withdrawal requests.
A considerable portion of these funds was directed towards loans extended to individuals within SBF’s inner circle. These funds were utilized for various purposes, including investments and political contributions. Ellison disclosed that Bankman-Fried believed the political donation strategy was highly effective, offering substantial political influence at a relatively low cost. However, she expressed her discomfort with the loans provided to insiders, stating, “I had reservations; it appeared as if Alameda was channeling funds to FTX executives.”
SBF Vs Ellison’s Tangled Legal Drama
Ellison’s testimony was fraught with personal history, marked by her guilty plea to fraud and conspiracy charges the previous year. Throughout the trial, both sides engaged in a heated exchange, with Bankman-Fried’s attorney, Cohen, attempting to shift blame onto Ellison. Cohen suggested that her financial decisions had left the companies vulnerable to market fluctuations.
Ellison’s testimony adds to a growing list of former FTX insiders who have spoken out against Bankman-Fried. Adam Yedidia, a former FTX developer and part of SBF’s inner circle, had previously told the jurors that Alameda’s actions seemed blatantly unethical. The courtroom drama continues to unfold as more witnesses shed light on the intricate web of financial misconduct involving prominent figures in the cryptocurrency industry.