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Alameda CEO Ellison reveals all this about SBF at the latest hearing

3min Read

In a twist of events, Alameda’s CEO and SBF’s former girlfriend Caroline Ellison revealed that SBF directed her to commit financial crimes. Furthermore, SBF had aspirations of becoming the President of the United States.

FTX's founder SBF aspired to become the President of the United States: Ellison

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  • Alameda’s CEO Caroline Ellison testified against SBF in the hearing on 10 October
  • Ellison admitted that FTX’s customer funds were used to buy back Binance’s stake in the exchange

The behind-the-scenes of FTX — once a leading crypto exchange — continues to unveil as the criminal trial of its founder Sam Bankman-Fried enters its second week. In today’s (10 October) hearing, Caroline Ellison – the CEO of FTX’s investment branch — Alameda and SBF’s ex-girlfriend — testified before the jury that would eventually decide on Sam’s fate.

Ellison was one of the first people in Sam’s allies to join hands with US regulators, along with Gary Wang – the co-founder of FTX. She had pleaded guilty to committing fraud that led to the collapse of FTX. The Southern District of New York made the announcement in December 2022, immediately after the extradition of SBF. Simultaneously, Ellison agreed to cooperate with the Southern District of New York in its investigation.

Former Alameda head reveals the inside operations of FTX

The testimony started with Ellison claiming that SBF “directed” her to commit financial crimes, according to a series of Tweets by Inner City Press. She stated she was guilty of Alameda taking billions of FTX customers’ funds for investments. While talking about the money taken to pay lenders, Ellison stated “In the ballpark of $10 billion. Ultimately around $14 billion.”

She further admitted that this was the reason the exchange did not have the money to repay lenders. The exchange filed for bankruptcy in November 2022 after failing to meet customers’ withdrawal demands. The bank run started after a report of the company’s balance sheet being dominated by the exchange’s token – FTT emerged.

Connections leading back to Jane Street

Ellison met SBF during the start of her career in Jane Street, where she was an equities trader for 18 months. According to the book Going Infinite, SBF was in charge of teaching her class of interns how to trade. Post which, he left the firm a year later to start Alameda.

In March 2018, SBF met Ellison for coffee in California, where he “pitched her about joining Alameda,” as per a Forbes report. Her salary during her time at the company was $200,000, with a $20 million bonus in 2021. The former executive also admitted to having an on-and-off romantic relationship with SBF, adding that he aspired to be the President of the United States.

Movement of FTX customer funds

Speaking about FTX’s funds moving to Alameda, Ellison stated that the exchange transferred money to its sister firm. This happened between 2020 and 2022. The funds amounting from $10 billion to $20 billion were used for loan repayment, investments, and stablecoin conversion. She further stated that “it was used for Alameda’s purpose and other purposes.”

Ellison even brought up the platform’s involvement with Binance – the world’s largest crypto exchange, saying,

“If a coin was trading for higher on Binance, we could withdraw from FTX and sell there. AUSA: Did you have concerns about Alameda using FTX customer funds? Ellison: I thought customers weren’t aware of. But I was just a trader at the time.”

Binance was the biggest competitor for FTX and at one time, its investor as well, owning a $2 billion stake. To buy back this stake, Alameda used $1 billion of FTX customer funds. She claimed that SBF was worried that Binance “would cause trouble.”

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Priya is a freelance cryptocurrency writer at AMBCrypto. A student in business administration, Priya focuses on the latest developments in the cryptocurrency and blockchain technology space.
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