Court testimony on Tuesday from former Alameda Research CEO Caroline Ellison alleged that disgraced cryptocurrency mogul Sam Bankman-Fried directed her to commit crimes. Trial defendant Bankman-Fried, the founder and former CEO of FTX, faces several fraud charges for his role in the collapse of the exchange last year. The bitcoin price was little-changed Tuesday during the testimony.
"Yes, we did," Ellison said when asked whether she committed a crime. "I mean Sam and I and others," Bloomberg reported from the court.
Ellison took the stand Tuesday as a star witness for prosecutors. She was one of the earliest recruits to FTX in 2017 and was appointed co-CEO of Alameda Research alongside Sam Trabucco in October 2021. Alameda operated as the sister hedge fund to FTX. Ellison served as the sole head executive following Trabucco's departure in August 2022. Ellison also dated Bankman-Fried over a two-year period in an on-again/off-again relationship.
"He was originally the CEO of Alameda and the owner of Alameda, and he directed me to commit these crimes," she said in reference to Bankman-Fried.
Bankman-Fried was the majority owner of Alameda Research even after departing as head executive in 2021. He previously stated in interviews that Alameda was a completely separate entity from FTX, and claimed he was not involved in running the firm.
Ellison said Alameda had access to an unlimited line of credit on the exchange from 2019 to 2022. The fund took "several billion dollars" from FTX customers for its own investments and to pay off lenders, she testified.
"We ultimately took around $14 billion, some of which we were able to pay back," Ellison said.
She revealed she knew Alameda had access to the borrowing facility during her December plea deal.
"He said FTX would be a good source of capital and he set up a system that allowed Alameda to borrow from FTX," Ellison testified when asked about Bankman-Fried's involvement in using customer money as a source of funds for Alameda.
Crypto Charges
Ellison pleaded guilty to seven felony counts including fraud and conspiracy charges in December and agreed to cooperate with prosecutors. Two other former FTX executives, Gary Wang and Nishad Singh, also pleaded guilty and agreed to help prosecutors.
Bankman-Fried pleaded not guilty to seven charges including conspiracy, wire and securities fraud in December. He potentially faces up to 115 years in prison if convicted.
Bitcoin Price
Bitcoin eased below $27,350 Tuesday afternoon from its overnight highs near $27,690. BTC reclaimed its $27,000 level at the end of September after trading in its $26,000 range since mid-August. The bitcoin price rallied 65% in 2023.
Ethereum retreated to $1,560 after sliding below its $1,600 level on Oct. 8. ETH hit a two-month high of $1,732 on Oct. 1 after falling from its $1,800 range in mid-August. Ethereum jumped 30% so far this year.
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