The trial of FTX founder Sam Bankman-Fried continued on Tuesday, with former top executive Caroline Ellison testifying against him. Ellison, who has agreed to cooperate with prosecutors, claimed that Bankman-Fried directed her to commit fraud, conspiracy to commit fraud, and money laundering. She stated that Bankman-Fried used stolen funds to fund his businesses, make donations, and contribute to political campaigns in the hopes of influencing cryptocurrency regulation. According to Ellison, Bankman-Fried thought he might be US president some day and instructed her to commit crimes and set up software loopholes that allowed Alameda to drain FTX accounts of unlimited funds.
Ellison’s testimony is crucial in the trial, as it could win her leniency when she is sentenced and could also be pivotal in the jury’s decision on whether Bankman-Fried is guilty of the fraud charges against him. Ellison’s relationship with Bankman-Fried dates back to 2017, when she worked as an intern at Jane Street, a hedge fund, and later joined his company after it was formed. The two also dated for a couple of years.
Sam Bankman-Fried. (Via Sam Bankman-Fried./Twitter)
Despite appearing composed, Ellison seemed emotional at times while answering questions posed by Assistant US Attorney Danielle Sassoon. Bankman-Fried has been jailed since August, when the judge concluded that he had tried to influence potential trial witnesses and could no longer be trusted to await trial under a $250 million bond and confinement to his parents’ home. Ellison’s former boss could face decades in prison if convicted, given the magnitude of the alleged crimes.
The allegations against Bankman-Fried suggest that he used his wealth and influence to manipulate the cryptocurrency market and perpetuate fraud. His estimated net worth of $32 billion on paper may have been amassed through illegal means, leading to a sharp fall from grace for the once-revered entrepreneur. The trial’s outcome will have significant implications for the cryptocurrency industry and the public’s perception of its inner workings.
