Ex-Girlfriend alleges billions in FTX cash diversions

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NEW YORK — The trial of FTX founder Sam Bankman-Fried took a star turn when his former fellow top executive, and girlfriend, Caroline Ellison, testified against him, saying he directed her to commit crimes before his cryptocurrency empire collapsed last November. The Stanford-educated Ellison, 28, testifying in Manhattan federal court throughout the afternoon, said she committed fraud, conspiracy to commit fraud and money laundering along with Bankman-Fried and others. Asked by a prosecutor about Bankman-Fried’s involvement, she said: “He directed me to commit these crimes.” Repeatedly, Ellison made clear that Bankman-Fried was behind the biggest financial moves in his companies, to the point that bitcoins he created were sometimes called “Sam’s coins.” She described him as “very ambitious” and envisioning eventually leading huge companies and using his money influentially. He even thought there was a 5% chance he’d become president someday, Ellison said. Assistant U.S. Attorney Danielle Sassoon asked her what he thought he’d be president of. “Of the United States,” Ellison answered. Ellison said Bankman-Fried set up systems that enabled his firm Alameda Research to withdraw unlimited sums of money from FTX accounts and he “directed us to take FTX money to repay our loans.” She said Alameda eventually withdrew up to $14 billion from FTX, although some of it was paid back. Some of the money, she said, went to political donations, including $35 million funneled through one political operative to Republican candidates and another $10 million that Bankman-Fried steered to President Joe Biden, money that she said Bankman-Fried thought bought him a measure of influence and recognition. Shortly after Ellison’s highly anticipated turn on the witness stand began, she was asked to identify Bankman-Fried in the courtroom. Ellison stood and scanned the courtroom for a long minute, at first unable to spot him, before gesturing his way with a flip of her hand and saying he was “over there wearing a suit.” At the outset, Sassoon asked her how she knew the defendant. She said she met him at Jane Street, a hedge fund, where she worked as an intern before joining his company after he formed Alameda Research in 2017. She then volunteered that they had “dated a couple years.” Eventually, Bankman-Fried installed Ellison as chief executive at Alameda, where she was paid $200,000 in salary with her biggest bonus of $20 million occurring in 2021. Ellison’s testimony immediately followed two days of testimony from Gary Wang, an FTX cofounder and another key figure in Bankman-Fried’s inner circle. He also testified under a plea agreement with prosecutors that he was directed by the defendant to set up software loopholes that allowed Alameda to drain FTX accounts of unlimited funds.

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