Caroline Ellison is arguably the star witness in the government’s case against Sam Bankman-Fried, the bankrupt crypto The former CEO of currency exchange FTX is on trial for fraud.What was evident during her testimony Tuesday was that, with three Like other key lieutenants who betrayed their former bosses, she took similar risks for much smaller rewards.
Ellison testified she conspired with Bankman-Fried “Committing these crimes,” The former CEO of Alameda Research, Bankman-Fried also owns a cryptocurrency hedge fund. She received no equity in Alameda and only half a percent of FTX. When she discussed taking a hedge fund stake with him, he was “initially receptive” but later told her “it was too complicated.”
FTX co-founder and former CTO Gary Wang owns 16% of FTX and 10% of Alameda. According to a recent SBF reveal by Michael Lewis, FTX’s former engineering director Nishad Singh owns 5% of the company. According to Lewis, Bankman-Fried owns the largest stakes – 90% of Alameda and more than half of FTX.
Additionally, Ellison said Tuesday that while the trio siphoned off billions of dollars in personal loans from Alameda — what prosecutor Danielle Sasson called “loans to insiders” — Sen instead invested a relatively paltry $1.3 million in a startup. Even Ryan Salame, co-chief executive of FTX’s Bahamas subsidiary, who past witnesses would not typically consider part of FTX’s inner circle, donated $35 million to Republican political campaigns.
By most standards, Allison was well paid while working for Bankman-Fried, with whom she also dated from time to time. Her base salary is $200,000, plus substantial bonuses, including a $20 million bonus in 2021, half of which she said is invested in a startup. (Prosecutors later told the judge that she had a personal investment in artificial intelligence darling Anthropic, but it was unclear whether that referred to the $10 million she had mentioned in previous testimony.)
Yet her relative lack of pay compared to those in Bankman-Fried, Singer and Wang’s boys’ club underscored a continuing theme throughout her testimony: She, as Bankman-Free How the only woman in De’s inner circle responded to him and his lieutenants, rather than the other way around.
Bankman-Fried has previously written that Allison was to blame for the collapse of FTX publish Depend on New York Times She failed to hedge her risks appropriately. “She continually avoided talking about risk management—and avoided my advice—until it was too late,” he wrote. One of his attorneys, Mark Cohen, touched on the subject again and again during his opening arguments, mentioning Ellison’s name several times. “As Alameda’s majority shareholder, he spoke to CEO Ms. Ellison and urged her to take hedging measures to protect against a recession,” Cohen said of his client.
However, Allison repeatedly emphasized in her testimony that it was Bankman-Fried who told her to ignore the huge risks facing Alameda. For example, in late 2021, she told Bankman Fried why it was extremely risky for Alameda to take out $3 billion in loans to invest in startups, which would further unbalance the hedge fund’s balance sheet.Even after she raised concerns, Bankman-Fried said he planned to continue issuing billions of dollars in loans, revealing FTX Ventures January 2022.
At one point, prosecutors asked Allison if her ex was willing to take the risk. She said that if tossing a coin had a 50 percent chance of making the world “twice as good” and “if the coin came up tails, the world would be destroyed, he would happily flip the coin.”
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