Explosive Testimony Reveals Former CEO's Revelations in Trial Against FTX Founder

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Explosive Testimony Reveals Former CEO's Revelations in Trial Against FTX Founder

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Towards the end of her second day providing testimony, Caroline Ellison, former CEO of Alameda Research, a crypto hedge fund, experienced a breakdown. Overwhelmed, she confessed, "I don't need to lie anymore," while recounting the final days of the now-bankrupt crypto exchange, FTX. This emotional moment marked a crucial turning point during one of the most intense days of the trial of Sam Bankman-Fried, the ex-CEO of FTX. As the head of the crypto hedge fund accused of facilitating the misappropriation of billions in customer funds, Ellison's testimony built upon her earlier revelations about unfair compensation, market manipulation, and more.

Ellison, who, along with Gary Wang and Nishad Singh, held a significant position within Bankman-Fried's crypto conglomerate, had a unique insight into the mind of the FTX founder due to their on-and-off romantic relationship since late 2018. During her testimony, she revealed that Bankman-Fried once mentioned his self-perceived 5% chance of becoming a future president, suggesting his alleged egotism. In contrast to other utilitarians, Ellison claimed that Bankman-Fried believed that rules such as "don't lie" or "don't steal" were incompatible with his framework, influencing her perspective over time.

On Wednesday, Ellison's initially monotonous descriptions of manipulated balance sheets transformed dramatically as she began recounting encounters involving a Saudi prince and, strangely, Thai prostitutes. The mentioned prince was none other than Mohammed bin Salman Al Saud, the Saudi Arabian leader. Ellison revealed that Bankman-Fried courted the Crown Prince in the fall of 2022, potentially seeking investments for FTX, while Alameda supposedly siphoned off billions of customer funds to repay loans and engage in risky bets. The Thai prostitutes entered the narrative when Ellison stated that Alameda allegedly bribed a Chinese government official, aiming to unlock approximately $1 billion frozen on two Chinese crypto exchanges, OKX and Huobi. She noted that Alameda created multiple accounts on OKX, using the identities of individuals she believed were Thai prostitutes, with the plan of having their main account suffer losses while the secondary accounts generated profits. However, the Thai-prostitute strategy failed, eventually resulting in a payment of $150 million, as detailed in a document Ellison sent to Bankman-Fried.

During the prosecution's chronological questioning of Ellison, the focus turned to the week leading up to FTX's declaration of bankruptcy. Following CoinDesk's publication of a leaked balance sheet from the crypto hedge fund, customers began withdrawing funds from FTX, triggering a bank run and loan recalls from lenders. Overcome with emotion, Ellison's voice quivered as she read aloud the messages, stating that "this was the worst week of my life."