NEW YORK — Caroline Ellison, the tech govt who ran Sam Bankman-Fried ’s hedge fund whereas typically relationship him, testified Tuesday that he directed her to commit crimes earlier than his cryptocurrency empire collapsed final November. She additionally revealed that her former boss thought he could be U.S. president sometime.
With Bankman-Fried watching from his courtroom seat, Ellison, 28, mentioned on the New York Metropolis trial that she dedicated fraud, conspiracy to commit fraud and cash laundering with Bankman-Fried and others as they stole from prospects and buyers in FTX, an organization Bankman-Fried began, and lenders to his hedge fund, Alameda Analysis.
“He directed me to commit these crimes,” she mentioned of Bankman-Fried.
Repeatedly, Ellison made clear that Bankman-Fried was behind the largest monetary strikes in his corporations, to the purpose that bitcoins he created have been typically referred to as “Sam’s cash.”
She described him as “very formidable” and envisioning finally main large corporations and utilizing his cash influentially, particularly in politics.
He even thought there was a 5% likelihood he’d develop into president sometime, Ellison mentioned.
“If you say president, what are you referring to?” requested Assistant U.S. Legal professional Danielle Sassoon.
“Of america,” Ellison answered.
Shortly after Ellison’s extremely anticipated activate the witness stand started, she was requested to determine Bankman-Fried within the courtroom. The bespectacled Ellison stood and scanned the courtroom for a protracted minute, at first unable to identify him, earlier than gesturing his manner with a flip of her hand and saying he was “over there carrying a swimsuit.”
The looks of Bankman-Fried, who sat together with his legal professionals, has modified dramatically just lately as he has misplaced weight and trimmed his well-known wild coif right into a tightly cropped look extra conventional amongst monetary professionals.
Bankman-Fried, 31, may face many years in jail if he’s convicted of fees lodged towards him when he was delivered to america from the Bahamas final December. He has pleaded not responsible.
Bankman-Fried was one of many world’s wealthiest folks on paper, with an estimated web value of $32 billion, when his cryptocurrency companies collapsed as buyers and prospects sought to empty their accounts final November. Chapter proceedings adopted as prosecutors alleged that stolen funds have been used to fund his companies, make donations and contribute to political campaigns within the hopes of influencing cryptocurrency regulation in Washington.
Ellison testified below a cooperation deal that might win her leniency at sentencing. It may be pivotal when the jury decides Bankman-Fried’s destiny on the seven counts he faces.
Bankman-Fried has been jailed since August, when Choose Lewis A. Kaplan concluded he’d tried to affect Ellison and different potential trial witnesses and will now not be trusted to await trial below a $250 million bond and confinement to his father or mother’s Palo Alto, California, house.
As Ellison testified, a number of of her buddies or on-line followers have been in attendance. In an overflow courtroom the place spectators may watch on a tv monitor, a few of them, smiles on their faces, rushed towards a display to see her up shut.
Ellison, a Stanford College graduate who majored in math, met Bankman-Fried whereas working as an intern on the funding agency Jane Avenue earlier than becoming a member of his firm quickly after he shaped Alameda Analysis in 2017.
She mentioned she found that the corporate was “in a lot worse form than I spotted,” a spot struggling massive losses with lenders pulling out a variety of their cash and over half the workers quitting.
Ellison mentioned she requested Bankman-Fried why he had not warned her and he “apologized and he mentioned that he hadn’t identified the right way to inform me.”
Ellison appeared composed all through the testimony, even when it touched on her romantic relationship with Bankman-Fried. By fall 2018, quickly after she joined Alameda, “we began sleeping collectively on and off,” she mentioned. By summer season 2020, they have been in a romantic relationship that they stored secret, she added.
By summer season 2021, they’d damaged up, however they resumed the connection in fall 2021, letting folks know this time, earlier than splitting for good in spring 2022, she mentioned.
Ultimately, Bankman-Fried put in Ellison as chief govt at Alameda, the place she was paid $200,000 in wage. Her largest bonus of $20 million got here in 2021.
Ellison mentioned Bankman-Fried arrange methods that enabled Alameda to withdrawal limitless sums of cash from FTX accounts and he “directed us to take FTX cash to repay our loans.”
She mentioned Alameda finally withdrew as much as $14 billion from FTX, though some was paid again.
Some cash, she mentioned, went to political donations, together with $35 million funneled by means of one political operative to Republican candidates and one other $10 million that Bankman-Fried steered to President Joe Biden, cash that she mentioned Bankman-Fried thought purchased him a measure of affect and recognition.
Ellison’s testimony instantly adopted testimony over three days from Gary Wang, an FTX cofounder and one other key determine in Bankman-Fried’s inside circle. He additionally testified below a plea settlement with prosecutors that he was directed by the defendant to arrange software program loopholes that allowed Alameda to empty FTX accounts of limitless funds.