Caroline Ellison Accuses Ex-Boyfriend Sam Bankman-Fried Of Directing Her To Commit Fraud Against FTX Users

In a shocking revelation in today’s trial, Caroline Ellison, the ex-girlfriend of FTX founder Sam Bankman-Fried, has come forward with serious allegations against the billionaire entrepreneur. Ellison claims that Bankman-Fried directed her to engage in illicit activities and commit fraud against FTX customers.

SBF Set Up The System, Ordered To Take Money: Ellison

Ellison, who maintained a relationship with Bankman-Fried for a significant period, alleges that she was coerced into committing crimes. In the courtroom proceedings on October 10th, Ellison confessed to engaging in fraudulent activities while at Alameda, asserting it was under the directives of Bankman-Fried. The erstwhile CEO of Alameda pointedly attributed the misappropriation of FTX user assets straight back to SBF, alleging he “made the systems” that resulted in Alameda diverting approximately $14 billion from the exchange.

She said, “He was the head of Alameda then FTX. He directed me to commit these crimes. Alameda took several billions of dollars from FTX customers and used it for investments. I sent balance sheets that made Alameda look less risky that it was.”

Ellison first crossed paths with Bankman-Fried at Jane Street Capital, where SBF persuaded her to depart from the investment firm and join his cryptocurrency-centric ventures. Subsequent to the disintegration of FTX in November 2022, reports imply that the duo has largely ceased communication.

The relationship between Ellison and SBF becomes a crucial element in the accusations directed at the ex-CEO, given his leadership of the crypto exchange while she spearheaded the team at Alameda. The fraud charges against Bankman-Fried hinge on allegations that he instructed Alameda to access FTX user funds without customer approval, utilizing them for various expenditures, including real estate acquisitions and political campaign contributions.

Wang Reveals FTX ‘Fixer’ Provided Him With Loans

During the cross-examination, Wang amusingly admitted to now understanding the difference between liquidity and solvency, eliciting chuckles from reporters. The defense did probe into the $200 million loans, revealing that Wang utilized a loan from Alameda Research for a home purchase. Evidence included a promissory note, dated April 30, 2022, detailing a $35 million loan to Wang from Alameda at a 2.21% interest rate, a seemingly standard business practice.

In a late October 9 court filing, Sam Bankman-Fried’s defense aims to probe Gary Wang during cross-examination for evidence of legal involvement in Alameda Research’s loan structuring. Despite Judge Kaplan previously barring such inquiries, prosecutors questioned Wang about $200-$300 million loans from Alameda Research, used for FTX venture investments and a Bahamas house purchase. Wang asserts these were legitimate loans, formalized in promissory notes with interest obligations.

Ellison and Wang, among the initial FTX and Alameda insiders, pleaded guilty in a deal with U.S. authorities in exchange for her testimony. The decision of whether Bankman-Fried will testify as part of his defense remains uncertain.

The live trial is set to recommence shortly after the intermission, around 2 PM New York time.