Sam Bankman-Fried cofounded FTX in 2019 and is its CEO. Photo FTX
Caroline Ellison, the former girlfriend of FTZ founder Sam Bankman-Fried and the former head of Sam Bankman-Fried’s crypto hedge fund Alameda Research, began her long awaited testimony on Tuesday in Bankman-Fried’s federal criminal trial.
When asked if Sam Bankman-Fried defrauded his customers, Caroline Ellison answered, “Yes, we did. I mean Sam and I and others.”
“Sam directed me to commit these crimes,” Caroline Ellison added in her testimony saying that Sam Bankman-Fried, “directed us to take customer money to pay loans.”
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“He was the person I reported to,” she said. “He owned the company, and he set my compensation and had the ability to fire me.”
“We ultimately took around $14 billion, some of which we were able to pay back. I sent balance sheets to lenders at the direction of Sam that incorrectly stated Alameda’s assets and liabilities.”
In December 2022, Caroline Ellison pleaded guilty to two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering. She is cooperating with the government in its investigation into FTX and Bankman-Fried.
Caroline Ellison is an American former business executive and quantitative trader who pleaded guilty to fraud, money laundering, and conspiracy charges. She is the former CEO of Alameda Research, a trading firm affiliated with the cryptocurrency exchange FTX.
Ellison was born in Boston, Massachusetts, in 1994. She graduated from Newton North High School and Stanford University, where she studied mathematics and economics. After graduating from Stanford, Ellison worked as a quantitative trader at Jane Street Capital, a proprietary trading firm.
In 2018, Caroline Ellison joined Alameda Research, a trading firm founded by Sam Bankman-Fried. In 2021, Ellison was appointed CEO of Alameda Research.
In November 2022, FTX and Alameda Research filed for bankruptcy. It was later revealed that Alameda Research owed billions of dollars to FTX, and that FTX had lent Alameda money from customer funds.
Sam Bankman-Fried stands accused of seven counts of fraud, embezzlement of billions of dollars and conspiracy. If convicted on all counts, he could be sentenced to as much as 115 years in jail. The charges came after his FTX cryptocurrency exchange company went bust a few weeks ago. The big question over the fall of FTX is “what happened to all of the money that people left with the company?” FTX was a crypto bank, so to speak, a place where people could park their virtual assets. But unlike with banks, there is no regulation over the handling of cryptos and FTX is said to have moved people’s cryptos around, basically that the company spent their money.
Based in the Bahamas, FTX was a cryptocurrency exchange that said it was built by traders, for traders. FTX offers industry-first derivatives, options, volatility products and leveraged tokens. FTX had more than one million traders using its services when it failed.
