Five key moments from Caroline Ellison’s testimony in Bankman-Fried trial

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NEW YORK : Caroline Ellison, the star witness in the fraud trial of Sam Bankman-Fried, testified this week that the 31-year-old former billionaire, her onetime boss and boyfriend, directed her to commit crimes including fraud. Bankman-Fried has pleaded not guilty to charges of stealing billions of dollars from customers at his now-defunct FTX cryptocurrency exchange. Here are five key moments from Ellison’s testimony. GREATER GOOD TRUMPED RULES LIKE ‘DON’T STEAL’ The FTX founder described himself as a “utilitarian” who thought the only rule that mattered was doing the greatest good for the greatest number of people, Ellison said. “He didn’t think rules like ‘don’t lie’ or ‘don’t steal’ fit in to that framework,” said Ellison, who ran Bankman-Fried’s crypto-focused hedge fund Alameda Research. She has pleaded guilty to fraud and agreed to cooperate with prosecutors. Ellison said Bankman-Fried asked her to falsify Alameda’s financial statements to keep lenders at bay amid a downturn in cryptocurrency markets in 2022. “I understood him to be directing me to conceal things in our balance sheet that we thought looked bad,” she said. BANKMAN-FRIED THOUGHT HE COULD BECOME U.S. PRESIDENT Bankman-Fried was “very ambitious,” Ellison said, adding that he “thought there was a 5 per cent chance he would become president some day.” He sought to cultivate an image as a “smart, competent, somewhat eccentric founder,” and viewed his low-effort appearance and hairstyle as “very valuable,” she said. The crypto mogul initially drove a company-owned luxury car in the Bahamas but traded it in for a Toyota Corolla. “He said he thought it was better for his image,” she said. BINANCE RIVALRY Bankman-Fried grew preoccupied with a rivalry with the crypto exchange Binance, which he thought would “mess with FTX,” leading him to borrow $1 billion in FTX customer funds to buy back Binance’s stake in FTX in 2021, Ellison said. Prosecutors showed jurors personal notes Ellison wrote the following year saying Bankman-Fried was seeking to get regulators to “crack down” on Binance. Prosecutors have said that Bankman-Fried used customer funds as he pleased, and that the resulting shortfall caused FTX’s collapse. NO PAPER TRAIL Ellison testified that Bankman-Fried directed employees to “be careful with what we put in writing, and not put into writing something that could get us into legal trouble.” Jurors saw notes where Ellison referred to more than $100 million in what she believed were bribe payments to Chinese officials as “the thing.” The assets were used to unfreeze crypto assets that Alameda held in China, she said. FTX COLLAPSE A RELIEF FOR ELLISON Ellison said her later days at Alameda were filled with “dread” that the truth would come out about the fund and its sister exchange. Tearing up on the stand, she said that when customers finally sought to withdraw funds from FTX that it did not have, leading to the exchange’s collapse in November 2022, she felt “indescribably bad” but also an “overwhelming” relief. “I felt a sense of relief that I didn’t have to lie anymore,” she said.

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