Sam Bankman-Fried Directed Me to Commit Crimes, Caroline Ellison Tells Court

Updated: 11 October 2023

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Former Alameda Research CEO Caroline Ellison claims Sam “SBF” Bankman-Fried, her ex-boyfriend and former FTX CEO, directed her to commit crimes.

Testifying on Tuesday, she stated that the actions resulted in the complete collapse of the cryptocurrency empire.

Ellison said that under Bankman-Fried’s instructions, Alameda accessed FTX customer deposits without consent, using them for various investments, including property purchases and political campaign donations. This misuse of customer funds is central to the allegations against Bankman-Fried.

AUSA: What was his involvement in the crimes?
Ellison: He was the head of Alameda then FTX. He directed me to commit these crimes.
AUSA: What makes you guilty?
Ellison: Alameda took several billions of dollars from FTX customers and used it for investments.

— Inner City Press (@innercitypress) October 10, 2023

She went on to say that Bankman-Fried established the systems that facilitated Alameda’s improper withdrawal of approximately $14 billion from FTX user funds. Alameda Research had unrestricted access to customer deposits using an unlimited credit line and direct access to customer funds sent to Alameda’s bank account, known as “fiat@,” she said.

Admitting to sending misleading balance sheets to banks at Bankman-Fried’s request to conceal the company’s actual financial risk, Ellison said: “Alameda took several billions of dollars from FTX customers and used it for investments, I sent balance sheets that made Alameda look less risky than it was.”

She further emphasized her close association with Bankman-Fried, revealing that they had dated for a “couple of years.” “We started sleeping together on and off,” she said.

They met during their time at Jane Street, a financial company that specializes in quantitative investments. Back then, Ellison was an intern, and Bankman-Fried was a trader. Bankman-Fried later persuaded her to come on board at his hedge fund, Alameda Research, where she initially worked as a trader. She became the CEO of the company in 2021, Ellison added.

She also revealed her compensation, stating that she had an annual salary of $200,000 and a bonus of $20 million in 2021.

Charges and Allegations Against Ellison and Bankman-Fried

Ellison has previously pled guilty to seven fraud charges, including conspiracy to commit wire fraud, wire fraud, commodities fraud, securities fraud, and conspiracy to commit money laundering. Bankman-Fried, on the other hand, faces several charges, including fraud, related to allegations that he and other FTX executives misappropriated billions of customer assets for their personal use, ultimately leading to FTX’s bankruptcy.

Now in its second week, the trial is witnessing the unfolding drama of these grave allegations. Bankman-Fried has maintained his innocence, denying all charges.