Caroline Ellison, Alameda's former Chief Executive Officer, is expected to take the stand today (Thursday) to testify against Sam Bankman-Fried (SBF) for the third day. Her previous testimony revealed instances of deceit and fraud at FTX before the exchange collapsed.
As the courtroom observed the proceedings, Ellison recounted the twists and turns in the final days of FTX and Alameda Research. According to a report by the Financial Times, in a text exchange with SBF just days before the exchange filed for bankruptcy, Ellison expressed relief, saying that it felt great to get it over one way or another.
Ellison, who had a complex history with her former boss, has pleaded guilty to fraud, and now, she is serving as the star witness in the trial against SBF. In her testimony, the demise of FTX signaled the end of Alameda's secret dealings, which included gambling with $10 billion of FTX customer funds.
FTX's Troubled Past
Her testimony delved deeper into the situation at the crypto exchange. She explained the content of a document that SBF wrote, outlining FTX's options as it grappled with the impending collapse. Names like Dustin Moskovitz, the Co-Founder of Facebook, and Pete Briger of Fortress Investment Group were listed as potential saviors of the exchange. Both Moskovitz and SBF were known for their commitment to effective altruism. However, SBF's efforts to secure a bailout failed.
FTX's downfall became inevitable when a surge in customer withdrawals exposed a multibillion-dollar deficit in its balance sheet, partly fueled by undisclosed lending to Alameda Research. Ellison disclosed that she had been ordered to create multiple "alternative" balance sheets for Alameda Research, some of which concealed substantial kickbacks to FTX's executives, and that Alameda had "borrowed $10 billion from FTX's customers."
Ex-Alameda CEO Caroline Ellison testifies at Sam Bankman-Fried trial https://t.co/0wboKiEbOG
— Financial Times (@FT) October 10, 2023
Besides that, Ellison implicated SBF in bribery. She stated that in 2021, he ordered a payment of $150 million to officials in an attempt to release approximately $1 billion in frozen funds on two Chinese crypto exchanges due to a money laundering investigation. When attempts to address the issue by trading through accounts in the name of "Thai prostitutes" failed, SBF allegedly shouted down a colleague who raised objections, the FT reported.
Shedding Light on Alameda's Financial Turmoil
During cross-examination, Ellison defended her position by stating that while she "absolutely could and should" have implemented financial risk management strategies earlier in the year, the fundamental issue was SBF's decision to make a series of investments that left Alameda in an unstable financial state. She mentioned that these investments involved borrowing billions of dollars through open-term loans, which were used for illiquid ventures, a move she had disagreed with.
Her testimony showed her personal and professional relationship with SBF, including the immense pressure and emotional turmoil it had caused her. She recounted a heated conversation in August 2022, during which SBF blamed her for Alameda's financial troubles.
This article was written by Jared Kirui at www.financemagnates.com.
You can get bonuses upto $100 FREE BONUS when you:
💰 Install these recommended apps:
💲 SocialGood - 100% Crypto Back on Everyday Shopping
💲 xPortal - The DeFi For The Next Billion
💲 CryptoTab Browser - Lightweight, fast, and ready to mine!
💰 Register on these recommended exchanges:
🟡 Binance🟡 Bitfinex🟡 Bitmart🟡 Bittrex🟡 Bitget
🟡 CoinEx🟡 Crypto.com🟡 Gate.io🟡 Huobi🟡 Kucoin.
Comments