{"id":71393,"date":"2023-10-11T10:50:38","date_gmt":"2023-10-11T14:50:38","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/caroline-ellison-testifies-in-sbf-trial-5-takeaways\/"},"modified":"2023-10-11T10:50:41","modified_gmt":"2023-10-11T14:50:41","slug":"caroline-ellison-testifies-in-sbf-trial-5-takeaways","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=71393","title":{"rendered":"Caroline Ellison Testifies in SBF Trial: 5 Takeaways"},"content":{"rendered":"
\n

Caroline Ellison, former CEO of Alameda Research, pointed to former boss and ex-boyfriend Sam Bankman-Fried as the person who called the shots at defunct crypto exchange FTX as well as her related company.<\/p>\n

Saying Bankman-Fried told her to withdraw FTX customer funds to finance investments and loan repayments, Ellison said \u201cHe directed me to commit these crimes.\u201d Alameda took \u201caround $14 billion\u201d from clients and customers of FTX, she said.<\/p>\n

\n

The prosecution\u2019s star witness, once one of Bankman-Fried\u2019s closest deputies, is expected to continue testifying on Wednesday. Here are five takeaways from Tuesday\u2019s testimony.<\/p>\n

    \n
  1. \n Ellison said FTX\u2019s $648 million purchase of shares in the mobile brokerage app Robinhood was paid for by Alameda. Before the stake was made public, Bankman-Fried asked that the shares be moved to another entity, Emergent Fidelity, an investing entity he controlled. She said Bankman-Fried didn\u2019t want his name associated with Alameda.<\/p>\n<\/li>\n
  2. \n Ellison also said Alameda loans were hidden in audits and that Bankman-Fried told her the auditors wouldn\u2019t see them. Ellison has pleaded guilty to seven felony counts, including conspiracy and defrauding customers and lenders. She has previously said that she and Bankman-Fried knew they were misleading lenders about FTX and Alameda being separate entities and about how much the trading firm was borrowing from the FTX trading platform.<\/p>\n<\/li>\n
  3. \n Rather than being separate entities, Alameda and FTX initially \u201cwere both run by the same team,\u201d Ellison testified, adding that Bankman-Fried set up the system that let Alameda borrow customer money from FTX, and was CEO of Alameda when it began using customer deposits. Bankman-Fried\u2019s defense attorney, Mark Cohen, has said Ellison bore some of the blame for FTX\u2019s collapse and that she didn\u2019t heed Bankman-Fried\u2019s advice to hedge Alameda\u2019s crypto bets.<\/p>\n<\/li>\n
  4. \n Ellison said Bankman-Fried was \u201cvery interested in politics,\u201d and that in addition to Alameda providing FTX executives with money to make political donations, he also told her there was a 5% chance he might become president some day. Bankman-Fried donated millions of dollars to political candidates and was among the largest individual donors to Democrats in the 2020 and 2022 elections.<\/p>\n<\/li>\n
  5. \n Bankman-Fried also liked to suggest wildly risky bets, such as a coin flip in which tails could mean the end of the world and heads would mean the world would be twice as good, Ellison said. <\/p>\n<\/li>\n<\/ol>\n

    Ellison met Bankman-Fried at the Wall Street trading firm Jane Street Capital in 2015, when she was a summer intern and he was a trader. She was a math major at Stanford University, and he was a recent graduate and \u201cmath nerd\u201d from MIT.<\/p>\n

    Bankman-Fried started Alameda Research in 2017, and Ellison joined the start-up as a trader in 2018. She said that before she joined Alameda, it had suffered large losses and half of the employees had quit.<\/p>\n

    The two dated off-and-on for two years, and \u201cthe whole time that we were dating, he was also my boss at work, which created some awkward situations,\u201d she said Tuesday.<\/p>\n

    Write to Janet H. Cho at janet.cho@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n

    Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    Caroline Ellison, former CEO of Alameda Research, pointed to former boss and ex-boyfriend Sam Bankman-Fried as the person who called the shots at defunct crypto exchange FTX as well as her related company. Saying Bankman-Fried told her to withdraw FTX customer funds to finance investments and loan repayments, Ellison said \u201cHe directed me to commit […]<\/p>\n","protected":false},"author":1,"featured_media":71394,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-71393","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nCaroline Ellison Testifies in SBF Trial: 5 Takeaways | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Caroline Ellison, former CEO of Alameda Research, pointed to former boss and ex-boyfriend Sam Bankman-Fried as the person who called the shots at defunct\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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