During the trial of SBF on Wednesday, Caroline Ellison, former CEO of Alameda Research and ex-girlfriend of SBF, was still under the spotlight. Recalling when the public found out Alameda misused FTX customers' funds last November, she cried on the witness stand, saying that it was the worst week of her life. "I felt a sense of relief that I didn't have to lie anymore," she added.
Ellison pointed out that when the lenders wanted to get back the loans to Alameda last year, SBF ordered the company to repay loans despite lacking funds. Ellison said that she understood he was asking her to use FTX customers' funds, because "he knew that's the only way it could be repaid."
By the time of June 2022, FTX customers had deposited $13 billion, but only $3 billion were available to them on the exchange. The other $10 billion had been borrowed by Alameda, half of which had been loaned to the company's executives and affiliated entities. When Genesis asked Alameda for a more updated view of the balance sheet, SBF told Ellison not to show the real situation, but to hide some information. Ellison then prepared 7 different balance sheets for SBF to choose from. The one with no disclosure of the funds owed to FTX was eventually sent to Genesis.
In the fall of 2022, when discussing Alameda having borrowed $10 billion from FTX, SBF screamed that it was Ellison's fault, she recalled. "But it was Sam who made all these investments that put us in this situation," Ellison said at the court, adding that she cried at the time.
Ellison's testimony also involves details of SBF's bribery of Chinese officials. In 2021, as an Alameda counterparty was under a money laundering probe, Alameda's accounts on Huobi and OKX, containing $1 billion, were frozen by the Chinese government. According to Ellison, SBF accepted advice from an employee named David Ma, and sent $150 million in crypto to addresses said to belong to Chinese officials to unfreeze the accounts.
Ellison will come back to the court tomorrow to be cross-examined by SBF lawyers.
To learn more, please read: the Trial of SBF
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