Caroline Ellison, the tech executive who ran Sam Bankman-Fried's hedge fund while sometimes dating him, testified Tuesday that he directed her to commit crimes before his cryptocurrency empire collapsed last November. She also revealed that her former boss was thinking he might be President of the United States someday.
At the New York City trial, Ellison, 28, said she committed fraud, conspiracy to commit fraud, and money laundering with Bankman-Fried and others as they stole from customers and investors at FTX, a company Bankman-Fried started and lenders to his hedge fund, Alameda Research.
She called him'very ambitious' and hoped that he would eventually lead big companies and use his money influentially, especially in politics.
He even thought there was a 5% chance that he would become president someday, he said.
In an interview with Sassoon, Sassoon asked the Assistant U.S. Attorney Danielle Sassoon.
Bankman-Fried's appearance has changed significantly recently as he has lost weight and trimmed his well-known wild coif into a tightly cropped look more conventional among financial professionals.
Bankman-Fried could face decades in prison if he is convicted of charges lodged against him when he was brought to the United States from the Bahamas last December. He has pleaded not guilty to the charge of manslaughter.
Bankman-Fried was one of the world's wealthiest people, with an estimated net worth of $32 billion, when his cryptocurrency businesses collapsed as investors and customers sought to empty their accounts last November. Prosecutors alleged that stolen money was used to fund his businesses, make donations and contribute to political campaigns in the hopes of influencing cryptocurrency regulation in Washington.
Ellison testified during a cooperation deal that could win her leniency at sentencing. It could also be pivotal when the jury decides Bankman-Fried's fate on the seven counts he faces.
Bankman-Fried has been in jail since August, when Judge Lewis A. Kaplan said he was trying to influence Ellison and other potential trial witnesses and could no longer be trusted to await trial under a $250 million bond and confinement to his parent's Palo Alto, California home.
As Ellison testified yesterday, several of her friends or online fans were in attendance. At an overflow courtroom where spectators could watch a television monitor, some of them smiled on their faces, rushed toward a screen to see her up close.
Bankman-Fried, a Stanford University graduate who studied math, met Ellison while working as an intern at investment firm Jane Street before joining his company in 2017 after he formed Alameda Research.
She said she discovered the company was in much worse shape than I realized, a place having large losses with lenders pulling out a lot of their money and over half the staff quitting.
The evidence made it clear that Ellison, who had been with Bankman-Fried, was composed throughout the testimony, even when it dealt with her romantic relationship. By fall 2018 she enrolled in Alameda, and soon after she joined, she said she started sleeping together on and off. By summer 2020, she said, they were in a romantic relationship that they kept secret.
By summer 2021, they had broken up, but they resumed the relationship in fall 2021, letting people know this time before splitting for good in spring 2022, she said.
Bankman-Fried then appointed Ellison chief executive at Alameda, where she received $200,000 in salary. Alameda eventually withdrew up to $14 billion from FTX, although some were paid back.
She said some of the money went to political donations, including $35 million funneled through one political operative to Republican candidates and another $10 million that Bankman-Fried steered to President Joe Biden, which she said Bankman-Fried thought bought him a measure of influence and recognition.
Ellison's testimony immediately followed testimony over three days from Gary Wang, a cofounder of FTX, and another key figure in Bankman-Fried's inner circle. He also testified under a plea agreement with prosecutors that Alameda had been directed to set up software loopholes that allowed Alameda to drain FTX accounts of unlimited funds.