Caroline Ellison, the ex-girlfriend of Sam Bankman-Fried, didn’t mince words when she appeared in Manhattan federal court on Tuesday.
She calmly told the jurors that Bankman-Fried was responsible for the decision to steal billions of dollars from FTX customer funds, a central point in the criminal fraud charges against him stemming from the November 2022 disappearance of $8 billion from his bankrupt cryptocurrency exchange.
In a bizarre twist, Bankman-Fried, known for his obsession with numbers, had once boasted to Ellison during their relationship that there was a “5 percent chance that he’d become president someday,” referring to the United States presidency, as Ellison disclosed in court.
Federal prosecutor Danielle Sassoon asked Ellison how she knew Bankman-Fried, to which she responded that they had “dated for a couple of years,” specifying that their relationship had been on and off from the summer of 2020 to the spring of 2022.
Ellison admitted to committing crimes as the CEO of Bankman-Fried’s crypto hedge fund, Alameda, which the authorities claim stole $8 billion in FTX users’ deposits to repay lenders. She pleaded guilty to her role in the scheme and was testifying to receive a more lenient sentence.
Sassoon then asked Ellison to describe Bankman-Fried’s criminal activities and how he was involved in the alleged theft. Ellison stated, “Bankman-Fried was the first CEO of Alameda, and later, became the owner of Alameda, and he directed me to commit these crimes.”
Furthermore, Bankman-Fried denied Ellison’s request to have ownership in Alameda after she took over as lone CEO and made significant decisions for the fund, including using FTX customer funds without disclosure.
“I handled day-to-day decisions, but for any major decisions, I would always run it by Sam,” Ellison testified.
After a minute of searching, she eventually pointed out her ex-boyfriend sitting at the defense table with his lawyers.
“He’s over there, wearing a suit,” she indicated with her hand.
Ellison is the latest former insider from FTX to testify against Bankman-Fried. Also pleading guilty to fraud charges and is cooperating with authorities, Gary Wang, had already testified that Bankman-Fried directed him to write computer code enabling Alameda to withdraw “unlimited” FTX user funds without consumers’ knowledge.
A former FTX developer, Adam Yedidia, also told the jurors that he resigned from the company after discovering that the firm repaid its creditors using customer deposits, sending a text to Bankman-Fried that read, “I love you, Sam,” just days before his departure.