Ellison told the New York court that SBF ordered her to lie about the state of financial statements for Alameda Research to secure more loans against customers’ deposits at FTX.
Details of how former crypto empire FTX and Alameda Research have emerged through the testimony from Caroline Ellison, former Sam Bankman-Fried’s (SBF) girlfriend. Ellison led the Alameda Research team but used funds from FTX customers to make risky crypto bets without traditional risk management practices. As a result, the duo was entangled in a web of lies that deceived other crypto firms that are now caught up in the bankruptcy including Gemini Earn users, and Digital Currency Group.
Alameda Research CEO Ellison Nails SBF for the Loss of FTX Customers’ Funds
The SBF attorneys will have a challenging time ahead fighting the details being revealed by Ellison, with more expected in the coming weeks from other top FTX executives who have pleaded guilty and agreed to work with the prosecutors. In a Wednesday court session, Ellison testified that she felt relieved when the FTX and Alameda Research started to collapse as she knew the lies could soon end.
According to courtroom testimony, Ellison prepared several balance sheets to conceal the financial turmoil in a bid to secure more debts. Interestingly, Ellison began playing by the SBF playbook more than a year before filing for bankruptcy protection.
“He told me to come up with alternative ways to present the information. He wanted me to conceal things on our balance sheet. So I prepared seven different balance sheets. I did not want to be dishonest but I presented the alternatives to Sam and let him decide,” Ellison noted.
On several occasions, SBF ostensibly instructed Ellison to repay Alameda Research debts using FTX customers’ funds despite being aware of the involved risks. By selling customers’ funds, FTX supported its native token FTT, whose price plummeted more than 99 percent after the bankruptcy filing.
During the courtroom testimonial session, Ellison said that she collaborated with other top executives to bribe the Chinese government officials with over $150 million to obtain access to local exchange accounts that had been frozen. At one time, Ellison said that SBF instructed them to use fake accounts from Thai prostitutes.
In a bid to keep FTX relevant to the global market, Ellison said that SBF orchestrated a move to have Binance scrutinized by the regulators. Moreover, SBF has paid millions of customers’ funds to politicians to have a controlling stake in the crypto regulatory process.
Before breaking the day’s testimony, Ellison told the court that SBF had plans to acquire Snap Inc (NYSE: SNAP). Additionally, SBF had long-term plans to become the president of the United States, which now remains a dream as he faces over 100 years in prison.
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