Sam Bankman-Fried trial: Ex-girlfriend Caroline Ellison blames him for stealing billions

Caroline Ellison, the former business partner and onetime girlfriend of crypto king Sam Bankman-Fried, told a New York jury on Tuesday that the couple had knowingly duped customers out of billions of dollars and that Bankman-Fried had “directed” her to misuse the money.

“Sam directed me to commit these crimes,” Ellison said under oath, adding that Alameda Research, the crypto hedge fund she ran, took $10 billion from FTX’s customers. She also said it was Bankman-Fried who set up the system that allowed her to move the money illegally and that it was Bankman-Fried’s idea to doctor the balance sheets the company sent to lenders to make Alameda’s losses not look as bad.

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Ellison is widely considered to be Bankman-Fried’s chief accomplice as well as the star witness for the government and testified in front of a packed room at the federal courthouse in Manhattan that her former boyfriend-boss should be held accountable for the crimes that led to FTX’s implosion.

Ellison, whose testimony is expected to continue for several hours, will likely be asked 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.

Elizabeth Williams/AP

She described Bankman-Fried as a boastful, ambitious man who told her there was a “5% chance” he would one day become president of the United States. She told jurors that he was the boss and she did what he told her to do.

“He was the person I reported to,” she said. “He owned the company, and he set my compensation and had the ability to fire me.”

She added that dating him caused drama and said they eventually stopped seeing each other romantically because he “often felt distant” and said he didn’t pay attention to her.

The defense has already hinted that it plans to go after Ellison, painting her as a deeply insecure woman who wasn’t very good at her job, failed to follow instructions, and didn’t deserve 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. In exchange for her testimony and cooperation, prosecutors said they would file a letter asking for leniency in her case.

“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.

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.

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.

(Tom Williams/CQ-Roll Call, Inc via Getty Images)

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 Gary Wang, another FTX co-founder, 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 of all of the charges against him, the 31-year-old could be looking at a life sentence.

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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 diary-like 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.