Caroline Ellison, one of Sam Bankman-Fried’s top deputies and also his ex-girlfriend, testified Wednesday that she felt relieved when his crypto empire began to collapse because it meant she could stop lying.
She mentioned the CoinDesk scoop that led to the company’s demise, explaining that the crypto news site’s scoop was based on a balance sheet Alameda sent to lenders to mislead them into believing the trading firm was on a more solid financial footing than it actually was – although the numbers were bad enough to cause the company’s collapse.
Ellison reported that Bankman-Fried instructed her to use FTX customer funds to repay Alameda’s lenders despite the risk involved.
She revealed an unrelated incident of bribery with Chinese officials in order to retrieve secured funds, demonstrating the confidence Bankman-Fried had in her.
Caroline Ellison wailed on the witness stand near the conclusion of her second day of testimony against her ex-boss and ex-boyfriend, the deposed cryptocurrency tycoon Sam Bankman-Fried.
The diminutive and soft-spoken former CEO of Alameda Research described the collapse of her hedge fund and its sister company, the FTX exchange, in November of last year, as well as the “relief” she felt when the public learned of their deception.
“I felt a sense of relief that I no longer needed to lie,” Ellison testified.
Her voice trembled and broke as she recalled a text message exchange with Bankman-Fried during the “worst week of her life.”
Ellison said as she reached for a tissue, “I felt indescribably bad about all the… people who lost their jobs… and the people who trusted us that we had betrayed.”
As she wept, the defendant Bankman-Fried did not glance up from his court-issued laptop and continued to type.
Ellison, the former Wall Street trader and key witness in the government’s criminal fraud case against Bankman-Fried, testified for a second day.
This is the smoking revolver
During her testimony, Ellison discussed the document that caused Bankman-Fried’s companies to collapse: the balance sheet CoinDesk’s Ian Allison reported on exclusively on Nov. 2, 2022.
