Star witness at US crypto trial says Bankman-Fried ordered fraud

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Disgraced crypto wunderkind Sam Bankman-Fried was the mastermind behind a scheme to defraud FTX purchasers of billions of {dollars}, the star witness in his US trial testified on Tuesday.

Caroline Ellison, Bankman-Fried’s former enterprise associate and girlfriend, mentioned that that they had stolen “round $14 billion” from purchasers of the cryptocurrency buying and selling platform earlier than it collapsed out of business late final yr.

The 31-year-old Bankman-Fried, co-founder and former CEO of FTX, has been charged with seven counts of fraud, embezzlement and felony conspiracy, and if convicted might face a de facto life sentence of greater than 100 years in jail.

In November 2022, the platform imploded, unable to deal with huge withdrawal requests from prospects panicked to be taught that a few of FTX’s funds had been dedicated to dangerous operations by Alameda Analysis, Bankman-Fried’s private hedge fund.

Ellison, a Stanford College arithmetic graduate, was appointed by Bankman-Fried in 2021 to go Alameda, whose actions had been largely financed by cash from prospects of FTX — with out their information.

She has pleaded responsible to fraud costs and agreed to cooperate with the prosecution as have two different shut associates of Bankman-Fried.

After taking a superb 10 seconds to determine her former romantic associate within the courtroom, Ellison mentioned he was “the proprietor of Alameda and he directed me to commit these crimes.”

Bankman-Fried “was the one who arrange the system” that noticed Alameda take the shopper cash from FTX and use it “for investments and to pay again money owed,” she mentioned.

“For main choices, I ran it by Sam. He was the individual I formally reported to. He was the proprietor of Alameda. He might have fired me if he wished to,” she mentioned.

– ‘Awkward conditions’ –

A former analyst who developed mathematical fashions for market finance, Ellison mentioned she expressed her reservations in regards to the relationship between FTX and Alameda.

“I used to be considerably involved as a result of it was one thing that prospects weren’t conscious of they usually would not be glad in the event that they’d realized about it,” she mentioned.

Bankman-Fried’s legal professionals are anticipated to argue towards this depiction, saying that their shopper had little deal with on the inside workings of Alameda’s enterprise and inserting the blame at Ellison for the alleged fraud.

Within the courtroom on Tuesday, Ellison mentioned that she and Bankman-Fried “dated for a pair years.”

“He was additionally my boss, which created loads of awkward conditions,” she mentioned.

The on and off once more couple and different FTX executives lived in a luxurious condo complicated within the Bahamas till Bankman-Fried was arrested and extradited to the US late final yr.

Zixiao “Gary” Wang, one other affiliate of Bankman-Fried, on Friday described the FTX co-founder as keen to interrupt the legislation and mislead allow the corporate and Alameda to put up robust development.


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