New York, Oct 10 (EFE) – The New York fraud and money laundering trial against FTX founder, Sam Bankman-Fried (SBF), featured on Tuesday the prosecution’s star witness, SBF’s ex-partner and right-hand woman Caroline Ellison, who claimed that the businessman ordered her to “commit these crimes”.
Ellison, 28, was called to testify on the fifth day of the trial against the FTX founder, her intervention began at the request of the prosecution to identify her former boss and partner.
Early in her testimony, a federal prosecutor asked Ellison, 28, if she had committed any crimes while working at Alameda Research, SBF’s hedge fund, and she said she had engaged in fraud, conspiracy to commit fraud and money laundering.
According to Ellison, the defendant directed her to use FTX clients’ funds without their knowledge to finance risky investments and loan repayments by Alameda Research, FTX’s investment arm of which she was CEO.
Ellison also said that, at Bankman-Fried’s request, she created misleading balance sheets that hid Alameda’s true risk profile from lenders.
She also claimed that SBF tried to hide its connection to Alameda, hoping to avoid PR repercussions if it became clear that the hedge fund was closely tied to FTX.
It is the first time the two have faced off since the cryptocurrency trading firms they co-founded collapsed in November, as the New York Times recalled.
Ellison insisted that Bankman-Fried, 31, considered the cryptocurrency emperor, was to blame for the FTX debacle.
“He directed me to commit these crimes,” said Ellison, who pleaded guilty last December to fraud and conspiracy along with two other FTX executives, Gary Wang and Nishad Singh, who are now cooperating with prosecutors.
Ellison indicated that Alameda took about $14 billion, of which it was only able to repay a portion, the Times adds.
The witness described SBF as an ambitious person who thought he could one day be president of the United States.
She also said that he was “truly risk neutral,” meaning that he was comfortable taking on any amount of risk for a slightly positive outcome or expected gain.
Federal prosecutors accuse billionaire investor Bankman-Fried of defrauding his platform’s clients of nearly $9 billion.
The defendant founded the FTX cryptocurrency exchange in 2019, which he promoted as a safe, effective and easy platform to invest in the financial instrument.
The company was valued at more than $32 billion, but filed for bankruptcy on November 11 after a rapid collapse after many users rushed to withdraw their funds amid reports questioning the company’s solvency, sending shockwaves through the industry.
Bankman-Fried, who has pleaded not guilty, faces a maximum of 115 years in prison if convicted. EFE