SBF faces testimony from Caroline Ellison of Alameda

NEW YORK, October 12, 2023 — Caroline Ellison, the former CEO of Alameda Research, testified on Thursday, October 12, against Sam Bankman-Fried in the FTX lawsuit in a federal court. ¹

Ellison is a cooperating witness in the government’s case against Bankman-Fried, who is charged with fraud and money laundering in connection with the collapse of FTX and Alameda Research.

Ellison testified that she and Bankman-Fried engaged in a series of fraudulent schemes to mislead investors and customers. She reportedly said that they used customer deposits from FTX to fund risky investments at Alameda Research and that they lied to investors about the financial health of both companies.²

Ellison also testified that Bankman-Fried instructed her to commit crimes, including falsifying financial records and misleading regulators. She said that she felt pressured to follow Bankman-Fried’s instructions because she was afraid of losing her job and her relationship with him.

Bankman-Fried has pleaded not guilty to all charges. His attorneys have argued that he is not responsible for the collapse of FTX and Alameda Research and that he was unaware of any wrongdoing by his employees.
Ellison further disclosed that the hedge fund, Alameda Research, appropriated approximately $10 billion in customer funds from FTX to settle debts and make investments. This money was accessed through a $65 billion line of credit on the exchange and funds deposited by FTX customers into an Alameda bank account, at a time when FTX lacked its own dedicated account.²

Ellison’s testimony deals a significant blow to Bankman-Fried’s defense. She stands as a credible witness with direct insight into the alleged crimes, making her testimony likely to strongly sway the jury.

1. Caroline of Alameda Testifies Against SBF: https://edition.cnn.com/2023/10/12/business/caroline-ellison-sbf-trial/index.html#:~:text=Caroline%20Ellison%20testified%20Thursday%20in,%E2%80%9CSam’s%2C%20I%20guess.%E2%80%9D[↩]
2. Caroline of Alameda Testifies Against SBF: https://www.reuters.com/news/archive/businessNews/article/usa-bankmanfried/caroline-ellison-testifies-she-committed-fraud-with-sam-bankman-fried-idUSKBN31A0PX[↩][↩]