Published
7 months ago on
October 11, 2023
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Caroline Ellison, the former Alameda Research CEO’s testimony, has revealed that Sam Bankman-Fried had aspirations to become the president of the United States.
Ellison testified against Bankman-Fried on the 10th of October and admitted that customer funds were used to buy back Binance’s stake in the FTX exchange.
Fraud And Presidential Aspirations
According to Ellison’s testimony, Bankman-Fried believed that there was a 5% chance he would become the president of the United States of America. Ellison revealed that Bankman-Fried shared his ambitions with her during their relationship, which spanned over three years. She also added that Bankman-Fried hoped to become a significant player in politics and business.
Ellison also testified that the former FTX CEO directed her to commit fraud, conspiracy to commit fraud, and money laundering, as they stole from FTX customers and investors. Ellison had pleaded guilty to charges brought against her back in December and has been cooperating with the authorities. On the other hand, Bankman-Fried, who is facing seven criminal charges, has pleaded not guilty to all charges. When talking about the money taken to pay lenders, Ellison gave a figure of around $10 billion before settling at $14 billion.
Ellison’s Testimony
Bankman-Fried was one of the wealthiest individuals in the world on paper, with a net worth of $32 billion. However, following the collapse of FTX, Bankman-Fried and other executives faced several charges. Ellison is testifying against Bankman-Fried under a cooperation deal that could see her receive a lenient sentence. Bankman-Fried has been in jail since August when the judge presiding over the trial concluded he had tried to influence Ellison.
During her testimony, Ellison revealed she met Bankman-Fried while working at the investment firm Jane Street. After he formed Alameda Research, Ellison joined him in 2017. Ellison stated that she found the company to be in significantly worse shape than she had realized, revealing large losses, unhappy lenders, and half the staff quit. She added that she asked Bankman-Fried why he hadn’t warned her, to which he apologized, stating he didn’t know how to tell her.
Ellison was relatively composed throughout her testimony, even when discussing the relationship between Bankman-Fried and her. She told the court they started dating in 2020 and split up in 2022. Following this, Bankman-Fried installed her as the chief executive at Alameda, which saw her earn $200,000, with her biggest bonus of $20 million coming in 2021.
Alameda Withdrew Funds From FTX Accounts
In her testimony, Ellison revealed that Bankman-Fried set up systems to allow Alameda Research to withdraw unlimited sums of money from FTX accounts. He also directed executives at Alameda Research to take FTX money and repay their loans. She revealed that Alameda Research eventually withdrew up to $14 billion from FTX, although she insisted some of this was paid back.
She revealed that money was also spent on political donations. This included $35 million sent through a political operative to Republican candidates. A further $10 million was sent to President Joe Biden’s campaign. According to Ellison, Bankman-Fried thought these donations had bought him immeasurable influence and recognition.
Ellison also talked about the platform’s involvement with Binance, stating,
“If a coin was trading for higher on Binance, we could withdraw from FTX and sell there. AUSA: Did you have concerns about Alameda using FTX customer funds? Ellison: I thought customers weren’t aware of it. But I was just a trader at the time.”
Binance was FTX’s biggest competitor and at one time, one of its biggest investors as well. The world’s largest cryptocurrency exchange owned a $2 billion stake in FTX. However, Alameda bought back this stake, using $1 billion of FTX customer funds. She added that Bankman-Fried was worried that Binance could cause trouble.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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