Sam Bankman-Fried trial: Caroline Ellison, ex-girlfriend of FTX founder, to testify

The criminal trial of former crypto king Sam Bankman-Fried will take a personal turn on Tuesday when federal prosecutors call their star witness, Caroline Ellison, to the stand.

Ellison is the former CEO of Alameda Research and the on-again-off-again love interest of Bankman-Fried. She is expected to provide insight into the tangled relationship between the hedge fund and FTX, the cryptocurrency exchange Bankman-Fried co-founded, and give jurors a detailed account of what led to the largest crypto collapse in the United States.

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Ellison is scheduled to testify after Gary Wang, another FTX co-founder, wraps up testimony that began on Friday.

(AP Photo/Elizabeth Williams)

Bankman-Fried’s bid to beat multiple federal fraud charges hinges on whether the jury believes he’s a bumbling youth who was out of his depth or a mastermind who stole billions to make himself, his family, and his close friends wealthy beyond their wildest dreams.

In its heyday, Bahamas-based FTX was one of the world’s largest cryptocurrency exchanges. It allowed customers to trade digital currencies for other digital currencies.

Bankman-Fried is accused of siphoning billions in customer funds from FTX into Alameda. Prosecutors have also accused him of using that money to pay for personal expenses such as two multimillion-dollar jets, as well as $200 million in real estate, which included a penthouse in the Bahamas he shared with Ellison. He’s also accused of making illegal campaign donations to Republicans and Democrats on Capitol Hill to buy power and influence regulations involving the crypto industry.

Prosecutors alleged Bankman-Fried ran his con from 2019 to November 2022, when FTX collapsed. He has denied the allegations.

Four of his company’s top lieutenants, including Wang, who met Bankman-Fried at math camp, have pleaded guilty to similar charges. Three have made deals with prosecutors to testify against him.

Bankman-Fried is facing seven criminal charges, including money laundering and securities fraud. If he is convicted on all of the charges against him, the 31-year-old could be looking at a life sentence.

(AP Photo/Bebeto Matthews, File)

Federal prosecutors believe Ellison’s testimony will be key to exposing Bankman-Fried as a crypto con artist, while the defense has already hinted that it plans to throw Ellison under the bus, painting her as a deeply insecure woman who wasn’t very good at her job, failed to follow instructions, and as someone undeserving of the massive salary she pulled in.

Following Alameda and FTX’s collapse in November, Ellison, a Stanford University graduate with a degree in mathematics, brokered a deal with prosecutors. Prosecutors said that in exchange for her testimony and cooperation, they would file a letter asking for leniency in her case.

Ellison is already on record admitting to filing “materially misleading financial statements” alongside Bankman-Fried and other top brass at the company. 

“I am truly sorry for what I did,” she told Judge Ronnie Abrams at her plea hearing, adding that she knew what she did was wrong and illegal. 

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In August, Bankman-Fried found himself in hot water after he was twice accused by prosecutors of trying to influence witnesses. He had also been accused of leaking copies of Ellison’s private diarylike writings to the New York Times in an effort to taint the jury pool and cast a shadow on Ellison, who at times described feeling overwhelmed by her job at Alameda and documented the pain linked to her breakup with Bankman-Fried, as well as other professional insecurities.

Judge Lewis Kaplan revoked his bail, and Bankman-Fried, who had been under house arrest at his parents’ home in Palo Alto, California, was sent to lockup until his trial began.