During the ongoing trial, Caroline Ellison has placed blame on Sam "SBF" Bankman-Fried for the alleged misuse of FTX user funds, stating that he was responsible for setting up systems that led to Alameda taking approximately $14 billion from the exchange.
The courtroom proceedings on October 10 saw Ellison, the former CEO of Alameda Research and a former business associate and girlfriend of Bankman-Fried, admitting to fraud during her tenure at Alameda under his direction. She claimed that Alameda had taken several billion dollars from FTX customers and used these funds for investments. Furthermore, Ellison revealed that she had sent balance sheets that painted a less risky picture of Alameda's financial position than it actually was.
The relationship between Ellison and SBF is a pivotal issue at the heart of the allegations against the former FTX CEO. Bankman-Fried is facing fraud charges related to directing Alameda to access FTX user funds without the customers' consent, subsequently using these funds for various purposes, including property acquisitions and donations to political campaigns.
The trial has witnessed other insiders, such as FTX co-founder and former CTO Gary Wang, testifying. Wang, who took the stand on October 5, has alleged that he, along with Ellison and former engineering director Nishad Singh, committed crimes. SBF's legal team has been cross-examining Wang, possibly attempting to shift some of the blame for the exchange's downfall onto Ellison. In their opening arguments, the defense argued that Ellison had ignored Bankman-Fried's request to hedge Alameda investments.
Ellison and Wang had previously pleaded guilty, agreeing to testify as part of a deal with U.S. authorities. It remains uncertain whether Sam Bankman-Fried will take the stand as part of his defense strategy.
This trial marks the fifth day of Sam Bankman-Fried's criminal trial, during which he faces seven charges related to fraud. He has pleaded not guilty to all charges and is expected to face a second criminal trial commencing in March 2024.
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