Sam Bankman-Fried directed fraud on FTX customers, Caroline Ellison tells jury
Caroline Ellison, the former chief executive officer of Sam Bankman-Fried's hedge fund, testified on Tuesday that the former crypto mogul directed her and others to defraud customers of his FTX exchange by taking their money without their knowledge.
Ellison, who said she previously dated Bankman-Fried, depicted her former boss as an ambitious young man who had no qualms about sharing misleading financial information with lenders, grew preoccupied with a rivalry with the Binance crypto exchange, and thought he could one day become U.S. president.
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Offering CollegeCourseWebsiteIndian School of BusinessISB Product ManagementVisitIndian School of BusinessISB Professional Certificate in Product ManagementVisitNorthwestern UniversityKellogg Post Graduate Certificate in Product ManagementVisitIndian School of BusinessISB Digital TransformationVisit Ellison said the hedge fund, Alameda Research, took about $10 billion in FTX customer funds to repay its debts and make investments. The fund gained the money through a $65 billion line of credit it had on the exchange, and from funds FTX customers deposited into an Alameda bank account when FTX lacked its own account.
«He was the one who set up these systems that allowed Alameda to take the money and he was the one who directed us to take customer money to repay our loans,» Ellison said during nearly three hours of testimony. She is expected to return to the witness stand on Wednesday.
The testimony by Ellison, 28, was keenly awaited. She is one of three ex-members of the 31-year-old former billionaire's inner circle who have pleaded guilty to fraud charges and agreed to cooperate with the Manhattan U.S. Attorney's office.
