A few days ago she took the stand in the case against Sam Bankman-Fried (SBF) of the failed crypto exchange, the so-called insider par excellence: Caroline Ellison.
However, her words could complicate SBF’s defence, as even her admittedly illegal actions were the execution of orders given by the founder of FTX and Alameda Research.
Summary
Carolina Ellison and her testimony in the case against SBF of the FTX crypto exchange
This week in the case against Sam Bankman-Fried (SBF), the founder of the collapsed crypto exchange FTX, the nickname “insider par excellence” took the witness stand: Carolina Ellison.
It has emerged that Ellison, CEO of Alameda at the time of the collapse, had been dating Bankman-Fried on and off for two years. So there was a kind of sentimental partnership between the two.
After admitting his guilt, Ellison decided to cooperate with the prosecution for almost a year in the hope of receiving a lighter sentence than the maximum 110 years in prison.
In practice, Ellison is said to have told the jury that the financial documents she prepared were “dishonest” and designed to hide Alameda’s financial instability. In one instance, she prepared seven “alternative” financial statements to present to a lender who had requested financial information.
Not only that, but she also lent credence to another statement by FTX executive Gary Wang, who claimed that Alameda had a secret and virtually unlimited line of credit to tap into FTX customers’ funds.
For all his illegal and criminal actions, Ellison insisted that he was merely carrying out orders dictated by the founder of both FTX and Alameda, SBF. In practice, Ellison claimed that all decisions were made by the defendant.
Carolina Ellison complicates SBF’s defence of collapsed crypto exchange FTX
Sam Bankman-Fried is alleged to be the founder and majority owner of both Alameda and FTX. The allegations against him include embezzling billions of dollars in customer deposits from his FTX crypto exchange to cover the losses of his other company, a cryptocurrency trading firm called Alameda Research.
In total, however, SBF is said to have pleaded not guilty to seven counts of fraud and conspiracy.
Apparently, Caroline Ellison’s testimony was meant to complicate the crypto exchange founder’s defence (and not just a little).
Indeed, Bankman-Fried’s defence team questioned Ellison for around six hours on Thursday, in a meandering and uncertain tirade that repeatedly provoked objections from the prosecution.
But Ellison’s words were also confirmed by an audio recording secretly made by former Alameda developer Christian Drappi, who said the decision to repay the loans with client funds was SBF’s.
This corroboration of Ellison’s testimony could pose serious problems for the defence if it tries to argue that Ellison was coerced by the prosecution or gave false testimony.
The conspiracy to manipulate the price of bitcoin (BTC) and bribes in China
In the current news, Ellison’s testimony also allegedly revealed that some $100 million transferred by Alameda to two crypto-wallets in China was a bribe.
In essence, she allegedly made this payment on behalf of SBF to induce Chinese officials to unblock two cryptocurrency trading accounts worth approximately $1 billion that Alameda held in China.
Not only that, but Ellison also revealed that his order came after other tactics to move funds out of China, including accounts belonging to Thai prostitutes, had failed.
More recently, Ellison’s testimony also alleged that SBF had conspired to manipulate the price of bitcoin (BTC).
