At first they were colleagues on a trading floor in New York. Then they were friends and ran a start-up together in Hong Kong. Eventually, they became partners in a whirlwind office romance that was documented in tabloid headlines around the world.
On Tuesday, the relationship between Sam Bankman-Fried and Caroline Ellison took another turn in a crowded Manhattan courtroom. The two faced each other for the first time since the collapse of the cryptocurrency trading firms they built together, FTX and Alameda Research, in November.
Ms. Ellison, 28, took the stand on the fifth day of Mr. Bankman-Fried’s trial on conspiracy and fraud charges related to the FTX implosion. It initially took her more than 10 seconds to identify Mr. Bankman-Fried when a prosecutor asked her to point out him.
Then, over the course of about 15 minutes of her initial testimony, Ms. Ellison repeatedly accused Mr. Bankman-Fried, 31, of crimes that led to FTX’s implosion. She testified that he directed her to use funds from FTX clients to fund venture investments and loan repayments from Alameda Research, a crypto hedge fund she managed for him. She said Alameda took in about $14 billion and could only pay back a portion of it.
“He directed me to commit these crimes,” Ms. Ellison said as Mr. Bankman-Fried sat across the room, flanked by his lawyers.
As the government’s key witness – and by far Mr Bankman-Fried’s most talked about associate – Ms Ellison is a key figure in the trial and her testimony was a highly anticipated moment.
She is seen as a key accomplice of Mr. Bankman-Fried, who became a symbol of hubris and dangerous risk-taking across the cryptocurrency industry after he was accused last year of masterminding a sweeping conspiracy to steal billions of dollars in deposits from FTX customers. Her romantic relationship with Mr. Bankman-Fried, with whom she dated on and off, gave her unique access to the FTX founder as he built his crypto empire.
In December, Ms. Ellison pleaded guilty to fraud and conspiracy. She, along with two other former FTX executives – Gary Wang and Nishad Singh – agreed to cooperate with prosecutors prosecuting Mr. Bankman-Fried. A fourth former top executive, Ryan Salame, also pleaded guilty but is not cooperating with authorities.
Mr. Bankman-Fried has pleaded not guilty. If convicted, he could face life in prison.
During the course of the criminal investigation last year, Mr. Bankman-Fried made Ms. Ellison an important element of his defense. He argued that she ignored his instructions and made mistakes in managing Alameda that contributed to FTX’s failure.
A few weeks before the trial, Mr. Bankman-Fried had his bail revoked and was sent to prison after a judge ruled that he had tried to intimidate Ms. Ellison by leaking her private writings to The New York Times.
In her testimony on Tuesday, Ms. Ellison briefly explained her history with Mr. Bankman-Fried. The couple met more than five years ago at the New York trading firm Jane Street, where Mr. Bankman-Fried worked after college. They bonded over a shared commitment to effective altruism, a philanthropic movement popular in tech circles, and eventually developed a romantic relationship. She stated that they were also together for “a few years.”
In 2018, Ms. Ellison joined Mr. Bankman-Fried at Alameda, where she worked as a trader and was then promoted to general manager. She moved with him from Alameda’s original headquarters in the San Francisco Bay Area to Hong Kong and later to the Bahamas, where FTX and Alameda were based when they imploded.
Mr. Bankman-Fried and Ms. Ellison lived in a luxury penthouse on the Bahamas island of New Providence with eight other friends and executives, including Mr. Wang and Mr. Singh.
Ms. Ellison was often unhappy. She worried about her relationship with Mr. Bankman-Fried and feared that she was unqualified to run a company as complex as Alameda.
“At the end of the day, I can’t wait to go home, turn off my phone, have a drink and get away from it all,” she wrote in February 2022 in one of the private notes to Mr. Bankman-Fried obtained by The Times.
This is a developing news story. Stay tuned for updates.