The former CEO of FTX, a prominent cryptocurrency exchange, Sam “SBF” Bankman-Fried, once harbored ambitions of becoming the President of the United States. This intriguing revelation comes from his former girlfriend and business associate, Caroline Ellison, who recently took the witness stand during a court appearance on October 10. In her testimony against Bankman-Fried, Ellison disclosed that he aspired to hold the highest office in the land.
Their personal relationship had ended, but they continued to collaborate in their leadership roles at Alameda Research and FTX until November 2022. Ellison also admitted to involvement in fraudulent activities during her tenure at Alameda, suggesting that Bankman-Fried had orchestrated systems that allowed the hedge fund to siphon approximately $14 billion from the exchange. This disclosure occurred on the fifth day of Bankman-Fried’s criminal trial as part of a plea agreement with prosecutors.
According to Ellison, between 2020 and 2022, a staggering $10 to $20 billion in FTX user funds found their way into Alameda’s coffers. This money served multiple purposes, including repaying loans, investments, and stablecoin conversions. Curiously, FTX chose not to disclose Alameda’s line of credit to investors or auditors.
During her testimony, Ellison shed light on Alameda Research’s actions, including buying back FTX Tokens (FTT) from the crypto exchange Binance using a line of credit under Bankman-Fried’s direction. She claimed it was to prevent potential trouble with Binance. Additionally, they sourced funds in 2021 through loans from Genesis. Despite her considerable responsibilities, Ellison indicated she didn’t necessarily feel qualified to be the CEO of Alameda. She described Bankman-Fried as the person she reported to and the one who held the power to terminate her employment.
Perhaps the most striking element of Ellison’s testimony was her account of how Bankman-Fried perceived risk. She claimed he was willing to take significant gambles, even to the extent of flipping a coin that could potentially have devastating consequences. His rationale was that as long as a win could make the outcome twice as favorable, it justified the risk.
Intriguingly, Ellison revealed that her annual salary stood at $200,000, supplemented by a jaw-dropping bonus of $20 million in 2021. Prior to Ellison’s testimony, FTX’s co-founder and former Chief Technology Officer, Gary Wang, also admitted to being involved in illicit activities alongside her, as did former FTX Engineering Director Nishad Singh.
As of the time of this report, Bankman-Fried’s legal team had not yet cross-examined Ellison. Their defense strategy appeared to revolve around attributing blame for FTX’s downfall to Ellison by alleging that she had utilized the exchange’s funds at her discretion. It’s essential to note that Bankman-Fried has pleaded not guilty to all charges.
