During her testimony, former CEO of Alameda Research, Caroline Ellison, claimed that she had been instructed by Sam Bankman-Fried to take approximately $14 billion from FTX customers in order to repay Alameda lenders. Ellison estimated that an amount between $10 billion and $20 billion had been deposited into Alameda's bank account as a result. She further disclosed that Alameda frequently borrowed sums ranging from $100,000 to $10 million from customer funds for trading purposes. Ellison also mentioned that she believed the funds used to establish FTX Ventures, a new crypto venture capital fund, as well as the funds employed in purchasing a stake in Robinhood, were sourced from Alameda. Despite being the CEO, Ellison acknowledged that Bankman-Fried held significant influence over major decisions.
Ellison, once a respected figure in the world of cryptocurrency hedge funds, has become a crucial witness in the government's trial against Bankman-Fried. Other FTX executives can provide valuable insights into the exchange's structure, but Ellison's testimony is particularly relevant as it sheds light on trading practices and the utilization of customer funds by Alameda and FTX. The personal dynamics between Ellison and Bankman-Fried, including their romantic involvement and disputes over disclosure, added complexity to their professional relationship. Following Bankman-Fried's arrest, Ellison has faced intense scrutiny, including the release of her personal diary by Bankman-Fried himself, which may have had legal implications. The defense appears to be attempting to shift blame onto Ellison for FTX's collapse.