
On the fifth day of the fraud trial, the prosecution's star witness, Sam Bankman-Fried, is set to take the stand.
Caroline Ellison, the former paraamour and business partner of FTX founder, is a former business partner and paramour, at times dating the 31-year-old and also serving as CEO of Alameda Research, the hedge fund closely associated with the failed cryptocurrency exchange. She remained with Bankman-Fried and other FTX executives in a huge Bahamas mansion where they all lived, worked, and managed the company. She is slated to testify in what could be the most damning picture ever of Bankman-Fried's alleged financial scheme, which is described by prosecutors as one of the largest in US history.
The day begins with testimony from Gary Wang, FTX co-founder, who first took the witness stand last week and has pleaded guilty to wire, securities and commodities fraud. Wang testified that Bankman-Fried was not surprised to find that FTX faced enormous financial shortfalls when the exchange's collapse began in 2022. Bankman-Fried faces seven counts of conspiracy and fraud charges. He has pleaded not guilty to a charge of gross misdemeanor misdemeanor.
In late 2022, Ellison cut a deal with federal prosecutors, pleading guilty to two counts of wire fraud and multiple financial conspiracy charges. Federal lawyers contend that her cooperation with them has been extensive, adding that her cooperation with them has been extensive. Ellison said in plea proceedings that she had agreed with Mr Bankman-Fried and others to provide materially misleading financial statements to Alameda's lenders. Prosecutors allege Bankman-Fried and those in his inner circle used money from FTX customers for Alameda's investments and trades, which led to an $8bn shortfall at FTX after the value of nearly all cryptocurrencies plummeted in 2022. The company eventually filed for bankruptcy.
The defense of Bankman-Fried's case appears likely to paint Ellison as a scorned lover and an incompetent businesswoman. His lawyers have questioned witnesses about an offer from the entrepreneur for Alameda to place a hedge to protect against a market downturn that she did not follow. Bankman-Fried himself has leaked information about her to the press. Judge Lewis Kaplan revoked the bail and sent him to prison after entries from Ellison's journal were published in the New York Times, finding probable cause for allegations of witness tampering.
Bankman-Fried's defense attorneys have tried to cast him as a simple, wayward boy genius who never intended to hurt anyone. One of his lawyers called him a math nerd who didn't drink or party. The prosecution has depicted Bankman-Fried as a greedy svengali who manipulated his business associates for his own financial gain and $10bn in fraud.
When a prosecutor asked what he thought of the deal, Yedidia said, 'I think it is a good thing to do,' he said.