Star Witness Testifies Against Former Boyfriend in FTX Crypto Exchange Trial
Caroline Ellison, the star witness in the trial against her former boyfriend Sam Bankman-Fried, broke down in tears as she described the deceitful actions that led to the collapse of FTX, the crypto exchange he founded. Ellison testified that a dishonest balance sheet was deliberately designed to mislead lenders and present a false picture of affiliate Alameda Research’s financial health. Despite her concerns, she revealed that Bankman-Fried instructed her to use FTX customer funds to repay Alameda Research’s lenders.
Ellison expressed constant anxiety about the possibility of customer withdrawals at FTX and admitted to using fake exchange accounts under the identities of “Thai prostitutes” to access funds locked in Chinese exchanges. She also claimed that a large bribe was paid to Chinese officials but did not implicate Bankman-Fried in this specific allegation.
In a confidential memo, Ellison referred to the payment to Chinese officials as a bribe and acknowledged Bankman-Fried’s encouragement to avoid putting sensitive information in writing. She also testified that Bankman-Fried had unconventional beliefs and didn’t adhere to principles like “don’t lie” and “don’t steal.”
The prosecutors presented evidence that Bankman-Fried aimed to target Binance, the largest cryptocurrency exchange globally, by encouraging regulators to crack down on it. Ellison mentioned that this strategy was seen as valuable for FTX’s market expansion.
Hot Take: Caroline Ellison’s emotional testimony provides damning evidence against Sam Bankman-Fried in the FTX crypto exchange trial. The revelations about a dishonest balance sheet, using customer funds for repayments, bribing Chinese officials, and targeting competitors raise serious questions about the integrity of FTX under Bankman-Fried’s leadership. The trial will continue to shed light on these allegations and determine the extent of Bankman-Fried’s involvement in these illegal activities.
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