‘I Didn’t Have to Lie Anymore’—FTX Collapse Was a Relief, Says Caroline Ellison

Whereas a lot of the jury’s consideration has been consumed by different stability sheets and to-do lists all through Caroline Ellison’s testimony, a tissue drawn by the previous Alameda Analysis CEO on Wednesday afternoon represented a break from meticulous solutions all through her time on the stand.

“I used to be in kind of a continuing state of dread,” she testified.

Ellison is the federal government’s star witness in its case in opposition to Sam Bankman-Fried, founder and former CEO of the once-dominant cryptocurrency change FTX. Bankman-Fried faces seven prison expenses associated to the collapse of the change. He’s alleged to have used billions in buyer funds to cowl up losses incurred by Alameda,  a buying and selling desk he additionally based in 2019.

“I knew that we must take the cash from our FTX line of credit score and I knew that that was cash that may very well be referred to as at any time,” Ellision testified in the present day. “And day-after-day, I used to be worrying about the opportunity of buyer withdrawals from FTX and the opportunity of this getting out and what would occur to individuals that may be harm by that.”

She began crying and her voice quivered whereas speaking in regards to the emotional weight lifted as soon as it was clear that Alameda and FTX wouldn’t survive a deadly flurry of buyer withdrawals final November. Ellison testified that Bankman-Fried, her boss and on-again-off-again boyfriend, directed her to make use of FTX buyer funds to plug holes in Alameda’s stability sheet. The alleged fraud resulted in $8 billion in losses for purchasers who held cryptocurrency on the change.

“I simply felt a way of aid that I didn’t should lie anymore,” she mentioned between sobs, including that concern for individuals who would lose their jobs and prospects had closely burdened her.

A chat between Bankman-Fried and Ellison was proven as proof not lengthy after. It centered on FTX and Alameda’s ultimate days. The previous Alameda CEO advised Bankman-Fried that she was in her “finest temper” in over a 12 months as each corporations went bust.

“Wow … uh … congrats … as a result of shit’s thrilling?” Bankman-Fried responded.

Federal prosecutors wrapped up Ellison’s direct testimony with little time left within the day. And after round quarter-hour of cross-examination that centered on the nuances of how Alameda recorded the stream of funds, the federal government referred to as foul.

“Objection, your honor,” mentioned Assistant U.S. Legal professional Danielle Sassoon. “That is complicated.”

Acknowledging that it had been a protracted day, Choose Lewis Kaplan proposed adjourning for the day round half-hour early to no one’s criticism. The previous crypto mogul’s protection staff is predicted to choose up the place it left off tomorrow.