SBF Trial Day 5: SBF Ex-Girlfriend Says SBF Directed Alameda to Borrow FTX Customers' Funds

SBF Trial Day 5: SBF Ex-Girlfriend Says SBF Directed Alameda to Borrow FTX Customers' Funds

Caroline Ellison, former CEO of Alameda Research and ex-girlfriend of SBF, said in court testimony that FTX founder Sam Bankman-Fried directed her to commit fraud, citing Alameda's borrowing FTX customers' funds.

Ellison claimed that she sent balance sheets at the direction of Sam which made Alameda’s balances look less risky to investors. She also testified that Alameda had obtained funds from FTX for its own investments, totaling up to approximately $14 billion.

Bankman-Fried “said to use FTX funds but to keep money on FTX” to meet customer withdrawal requests, Ellison said. A lot of this money went to loans made to members of Bankman-Fried's inner circle, with funds going toward investments and political donations, she said. According to Ellison, Bankman-Fried thought the political donation strategy was “highly effective,” offering “very high returns in terms of political influence” at a modest cost.

After being appointed CEO of Alameda Research, Ellison continued to report to SBF, although Bankman-Fried began to focus on running the FTX exchange and appeared to be stepping back from the hedge fund. Ellison claimed she had no equity in Alameda despite asking for it.

Ellison also referred to the "essentially unlimited" line of credit Alameda had at FTX. She described Bankman-Fried as the person who set up these systems.

In addition, Ellison stated that “SBF frequently instructed us to borrow as much money as possible and mentioned wanting to buy more FTT.”

To learn more, please read: the Trial of SBF

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Source

FTX

SBF

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