Caroline Ellison, a former employee of FTX and girlfriend of founder Sam Bankman-Fried, testified in court about Bankman-Fried’s plans to repay FTX customer accounts. One plan involved raising money from Saudi Crown Prince Mohammed bin Salman. Ellison also mentioned Bankman-Fried’s concern about his public image, including his belief that his long hair contributed to his narrative.
Ellison, who pleaded guilty to fraud charges, testified that Bankman-Fried instructed her and other employees to defraud FTX customers by funneling money to sister hedge fund Alameda Research. She explained how they manipulated balance sheets to hide borrowed customer funds when crypto lender Genesis called back loans.
Ellison expressed her constant state of dread due to the scheme and her worries about customer withdrawals. She continued with the scheme because Bankman-Fried told her to.
Bankman-Fried’s trial involves federal charges of wire fraud, securities fraud, and money laundering. Ellison also revealed that Bankman-Fried instructed employees to use disappearing messages on Signal and be cautious about written communication.
Ellison discussed her interactions with Bankman-Fried regarding FTX’s financial problems, including discussions about acquiring BlockFi or selling equity. She took some blame but noted that Bankman-Fried made investment decisions that put them in a leveraged position.
She kept a Google Doc titled “things Sam is freaking out about,” which included raising money from Mohammed bin Salman and causing regulatory issues for Binance. Bankman-Fried was proactive in managing FTX’s public image through relationships with reporters and investments in publications.
Bankman-Fried’s personal appearance was important to him, particularly his hair. Ellison mentioned his sloppy dress in 2022 and how he considered his hair valuable for his narrative.
During the implosion of FTX, Ellison felt a sense of relief that she didn’t have to lie anymore. After moving FTX money, the company only had $4 billion to cover $12 billion in customer holdings.
Hot Take: Bankman-Fried’s Trial Reveals Alarming Allegations of Fraud and Manipulation in the Crypto Industry
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