Caroline Ellison, Sam Bankman-Fried’s former girlfriend, accused the ex-cryptocurrency superstar in the first minutes of her hearing on Tuesday, claiming she broke the law on his orders.
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“He was the boss of Alameda and the owner of Alameda and he gave me instructions to commit these crimes,” Caroline Ellison said.
The Stanford University mathematics graduate was appointed by the defendant to head the Alameda Research hedge fund, whose activities, without their knowledge, were largely financed with funds from customers of the cryptocurrency exchange platform FTX.
Co-founded by Sam Bankman-Fried in 2019, FTX filed for bankruptcy in November 2022 after many customers learned their funds had been used in this way and sought to get their share back. After the bankruptcy, around eight billion dollars were missing.
Sam Bankman-Fried is accused of setting up this system of communication ships between FTX and Alameda while keeping it secret from the platform’s customers, investors and creditors.
Alameda has pumped out a total of around $14 billion from FTX accounts, estimated Caroline Ellison at the hearing, who said she had been dating “SBF” for “approximately two years.”
“Alameda needed billions of dollars to make investments and repay debts,” she explained, pointing out that in addition to FTX customers, investors in the platform and Alameda’s creditors were also misled about the financial status of the two companies.
The 28-year-old pleaded guilty to seven charges in December and agreed to cooperate with Manhattan federal prosecutor Damian Williams. She agreed to testify at Sam Bankman-Fried’s trial in exchange for a reduced sentence, which has not yet been handed down.
When asked by Danielle Sassoon, an assistant federal prosecutor in Manhattan, about the nature of the facts she was accused of, she mentioned “fraud, criminal conspiracy to commit fraud and money laundering.”
Since the bankruptcy, “SBF” Caroline Ellison has regularly accused errors and negligence in Alameda’s management.
He assured that he no longer followed Alameda’s daily activities or financial situation in the last months before the failure of FTX and relied on his boss, even if he was still the majority shareholder.
But during his hearing on Friday, FTX co-founder Zixiao “Gary” Wang argued that Sam Bankman-Fried continued to closely monitor Alameda’s operations until the company filed for bankruptcy.
“It was he who set up the system” that made it possible to siphon funds from FTX customers, assured Caroline Ellison.
Tuesday morning began with the defense’s cross-examination of Gary Wang, who was not put in trouble. The lawyers of “SBF” insisted in particular on the cooperation of the former technical manager of FTX with the authorities.
Sam Bankman-Fried, who is also charged with seven counts, faces more than 100 years in prison if convicted.