The second week of the criminal trial for former FTX exchange CEO Sam “SBF” Bankman-Fried continues on Oct. 10 with all eyes on the testimony for the day from key witness Caroline Ellison.
Ellison is both the former romantic partner of SBF and the former CEO of the FTX-affiliated hedge fund Alameda Research, which also became defunct in November 2022 and filed for Chapter 11 bankruptcy status.
The former Alameda CEO had lived with Bankman-Fried, along with other FTX executives, in the Bahamas for a period of time.
Given Ellison’s former positions, she was a part of Bankman-Fried’s inner circle and in her testimony, prosecutors and the presiding judge over the case John Lewis Kaplan expect her to provide details regarding the shuffling of customer funds between FTX and Alameda Research.
The main focus of the trial thus far has been the allegedly fraudulent use of customer funds to repay FTX debtors.
Particularly anticipated will be Ellison’s commentary on a meeting that took place in November 2022, during which she admitted to employees of Alameda that she’d been given the go-ahead by Bankman-Fried to use funds for the above-mentioned purposes.
Related: FTX used Python code to fake its insurance fund figure — Gary Wang
In December 2022, Ellison, along with former FTX chief technology officer Gary Wang, pleaded guilty to her alleged role in the fraud that caused the collapse of the exchange.
Shortly after both pleaded guilty, on Dec. 22 they were hit with additional fraud charges by the United States Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC). The SEC alleged that Ellison furthered the fraud scheme through price manipulation of the FTX Token.
Ellison then agreed to a plea deal with the Office of the U.S. Attorney for the Southern District of New York, which means full disclosure of information and documents demanded by prosecutors during the course of the trial. In exchange, Ellison was able to evade all major charges against her including a potential 110-year prison sentence.
Shortly after, she revealed that she had been aware of FTX customer funds being used, saying that Alameda had access to a “borrowing facility” through FTX from 2019 to 2022.
The U.S. Department of Justice said that Ellison’s personal memos, which include diary entries, will most likely be used as evidence against Bankman-Fried.
SBF faces charges of seven counts of conspiracy and fraud tied to the collapse of FTX, to all of which he has pleaded not guilty. Judge Lewis Kaplan is overseeing the case.
Cointelegraph reporters are on the ground in New York for the trial of former FTX CEO Sam “SBF” Bankman-Fried. As the saga unfolds, check here for the latest updates.
Magazine: SBF trial underway, Mashinsky trial set, Binance’s market share shrinks: Hodler’s Digest, Oct. 1–7
Source: https://cointelegraph.com/news/sbf-trial-alameda-ceo-caroline-ellison-sam-bankman-fried
