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New York CNN –
Caroline Ellison, the 28-year-old star witness in one of the most watched fraud trials in U.S. history, is expected to take the stand as soon as Tuesday to provide rare insight into the collapse last year of a multibillion-dollar crypto empire. Will take. ,
His testimony is key to prosecutors’ case against Sam Bankman-Fried, whom they accuse of masterminding a scheme to steal billions of dollars from customer accounts at his now-bankrupt crypto trading platform FTX.
Ellison is one of three former executives in Bankman-Freed’s inner circle who have since turned their backs on her, and have agreed to plead guilty and cooperate with prosecutors in hopes of receiving a lighter sentence.
But Ellison, the former CEO of FTX sister firm Alameda Research, is perhaps the second most important person in the case after Bankman-Fried, who has pleaded not guilty and repeatedly tried to win a conviction, which he ultimately did. Viewed as a bad business decision. By fraud.
As the former head of Alameda — and Bankman-Fried’s on-again, off-again girlfriend — Ellison is uniquely positioned to testify about how the crypto business spiraled out of control and ultimately fell into bankruptcy.
Prosecutors’ case hinged on evidence that FTX and Alameda were deeply linked financially, despite Bankman-Fried’s repeated assurances that they were separate companies, operating independently of each other. Prosecutors say the reality is that SBF set up both companies and used them as his personal piggy bank. They say that by withdrawing money directly from FTX customer accounts, Bankman-Fried spent on luxury real estate for herself and her family, made risky bets on digital assets and donated millions of dollars to US political campaigns.
Ellison, a Stanford graduate with a degree in mathematics, told the court in a hearing In December Alameda had virtually unlimited borrowing access to FTX, and it agreed to keep the two companies’ relationship hidden from investors and clients.
“I’m really sorry for what I did,” Alison said. “I knew it was wrong.”
Until now, the majority-female jury has heard exclusively from male witnesses, who often speak at length about the technical aspects of the business, walking jurors through spreadsheets, repeating definitions of cryptocurrency, computer code and What does it mean to have a negative balance?
Ellison, based on her now-public writings, can offer a more personal, raw testimony. Already, elements of her troubled relationship with the SBF have become public – not least because Bankman-Fried herself leaked some of her private writings to the New York Times, an act that led to prosecutors’ subsequent argument. He eventually went to jail for trying to scare Alison. tests. (SBF lawyers argued that this was not witness tampering, but an effort to counter the “toxic” media environment that had tarnished their reputation).
In a Google Doc addressed to Bankman-Freed in the spring of 2022, Ellison wrote that their breakup had “significantly diminished” her enthusiasm about her job, and that life in Alameda “feels so connected to you What happened was painful.”
Prosecutors have indicated in court documents that a special meeting, captured on audio recording, will be part of their interrogation.
As Alameda was rising last fall, Ellison told his staff that the fund had borrowed money from FTX client accounts to pay lenders. According to court documents, when an employee asked who made the decision, Ellison responded: “Um… Sam, I think.”
The trial began last Tuesday in Manhattan federal court and is expected to last six weeks. Prosecutors have already presented evidence that appears incriminating for Bankman-Fried, although the defense has not yet presented its case. Get here for everything you missed last week.