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Caroline Ellison's Testimony Against Sam Bankman-Fried
11/10/2023
In the ongoing trial of FTX exchange founder Sam Bankman-Fried, star witness Caroline Ellison, the former CEO of Alameda Research, testified that she had committed fraud at Bankman-Fried's direction. Ellison, who had pleaded guilty to fraud and conspiracy charges, stated that she sent balance sheets as directed by Bankman-Fried to make Alameda's balances appear less risky to investors. This testimony offers insight into the decision-making that led to the epic collapse of FTX in November. Additionally, Ellison revealed that Alameda borrowed funds from FTX customers, with the money often directed toward loans for members of Bankman-Fried's inner circle and political donations, which Bankman-Fried deemed "highly effective" for political influence. Furthermore, Ellison testified that she always deferred to Bankman-Fried despite her appointment as CEO of Alameda, and she discussed Bankman-Fried's desire to borrow as much money as possible and his reasoning for including FTX's exchange token, FTT, on Alameda's balance sheet.
Notably, this testimony indicated that FTX was facing financial challenges and sought to avoid putting its loans in danger. Bankman-Fried's defense team raised objections during the testimony, and their cross-examination will likely aim to discredit Ellison. The case involves allegations of fraud and misconduct at FTX and Alameda Research, providing valuable insights into the operations of the cryptocurrency industry and the relationship between FTX and Alameda.
