On Wednesday, the FTX trial continued with the prosecution questioning Carolin Ellison. The ex-girlfriend of FTX founder Sam Bankman-Fried (SBF) is a key government witness in the indictment against SBF and has already pleaded guilty to financial crimes. SBF, on the other hand, has pleaded not guilty to the seven counts. The defense’s questioning of Ellison continues Thursday.
What Carolin Ellison Testified
In the ongoing criminal trial against Sam Bankman-Fried, Caroline Ellison, former CEO of Alameda Research, continued her testimony, revealing more about the inner workings of the crypto hedge fund and its relationship with FTX.Key Highlights:
- Ellison testified that Bankman-Fried had considered raising funds from Saudi Crown Prince Mohammed bin Salman (MBS) as a potential solution to repay FTX customer accounts.
- She also shared a Google Doc she maintained, which had a subcategory labeled “things Sam is freaking out about.” This list included concerns about raising funds from MBS and the desire to see rival exchange Binance face regulatory crackdowns.
- Ellison, who had previously pleaded guilty to multiple counts of fraud, is now seen as the prosecution’s star witness against Bankman-Fried.
- On her second day of testimony, Ellison detailed how FTX customer funds were used to repay loans to Alameda Research. She also revealed that crypto lender Genesis had requested a balance sheet in 2022. To present a more favorable financial picture, alternative balance sheets were created that omitted significant borrowed customer funds.
- The former CEO expressed her constant state of dread, fearing the discovery of the mismanagement of funds and the potential fallout.
- Ellison also discussed Bankman-Fried’s concerns about his public image, including his belief that his long, unkempt hair contributed positively to his public persona.
- The trial also touched upon Bankman-Fried’s communication directives, instructing FTX and Alameda employees to use disappearing messages on the Signal app and to be cautious about written communications.
- Ellison’s relationship with Bankman-Fried, both professional and personal, was also explored. The two had dated in the past, and Ellison described her efforts to maintain a professional distance after their breakup.
- The testimony provided a glimpse into the challenges and pressures faced by the crypto firms, with Ellison highlighting the significant gap between company liabilities and the funds shown to lenders.
What’s Next In The FTX Trial
The defense is expected to cross-examine Ellison on Thursday, likely bringing more revelations and insights into the case.
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