Caroline Ellison had always avoided the limelight – until she appeared in a New York court on 10 October to testify against her former boss and on-off lover, the disgraced crypto-billionaire Sam Bankman-Fried, who is on trial for fraud. The former CEO of the cryptocurrency trading firm Alameda Research and self-described “fake charity nerd girl” gave no interviews and issued no statements after Bankman-Fried’s crypto empire collapsed in November 2022, when it was found that more than $8bn of customer funds were missing from his cryptocurrency exchange, FTX. He denies the charges. Outside the courtroom she looked a hunched and hunted figure, with thick glasses and a pale, owlish face. Inside, she was the prosecution’s star witness, and between the nervous giggles observers detected an air of defiance as she accused Bankman-Fried of leading her to lie and steal.
Alameda Research was majority-owned by Bankman-Fried, who set up the firm in 2017 and appointed Ellison as co-CEO with Sam Trabucco in October 2021. By 2022, when the crypto market crashed, it had racked up billions of dollars in debt and was using FTX’s customer deposits to repay it. Bankman-Fried has blamed Alameda’s problems on Ellison’s financial incompetence. But over three days on the stand, Ellison accused Bankman-Fried of “directing” her to commit crime by secretly using FTX money to shore up the firm. A recording of an all-team meeting in November 2022 appears to support her account. Ellison also accused Bankman-Fried of instructing her to fudge Alameda’s books and pay out a bribe. She said he had corrupted her morals by telling her that the money raised would be used to do so much philanthropic good that the ends justified the means. “I think it made me more willing to do things like lie and steal over time,” she said.
Content from our partners
