The ongoing fraud trial of Sam Bankman-Fried (SBF) is set to witness potentially game-changing testimonies this week as former Alameda Research CEO and one-time romantic partner of SBF, Caroline Ellison, is set to take the stand on Oct. 10.
The testimony could offer the most in-depth and potentially damaging revelations about FTX and Alameda’s financial dealings.
Ellison was a focal point in the trial even before her scheduled testimony due to her close relationship with SBF and her position at Alameda.
Ellison’s testimony could define the trial
Prosecutors plan to use Ellison’s testimony to expose the alleged financial misconduct between FTX and Alameda. Conversely, SBF’s defense team intends to portray Ellison negatively, emphasizing her perceived lack of business prowess and personal motivations, given their prior romantic involvement.
Previously, Adam Yedidia, an FTX developer and close associate of SBF, testified about the personal relationship between Ellison and the former FTX CEO, which began around early 2019. This personal narrative has been a recurring theme in the trial, with implications suggesting that personal dynamics may have influenced business decisions.
Ellison’s court statements from 2022 already hinted at the depth of her upcoming testimony, indicating SBF’s central role in an alleged scheme that drained $10 billion from clients.
In November 2022, following the collapse of FTX and Alameda, Ellison secured a plea agreement. Admitting to her role in the financial misdealings, she acknowledged:
“I agreed with Mr. Bankman-Fried and others to provide misleading financial statements to Alameda’s lenders.”
In a remorseful admission, she also recognized the illegal nature of her actions.
While SBF’s defense team is positioning Ellison as the primary catalyst for the downfall of FTX and Alameda, citing questionable business decisions, they also pointed out that despite the crypto market’s vulnerability, Ellison failed to take protective measures advised by Bankman-Fried in early 2022.
Furthermore, the defense will likely challenge Ellison’s credibility, citing past diary entries that were leaked to the New York Times. The writings detailed her insecurities about her leadership at Alameda and personal struggles regarding her relationship with Bankman-Fried.
The leak led to Judge Lewis Kaplan revoking SBF’s bail due to concerns over him trying to influence the trial and potential witnesses.
Gary Wang reveals ‘unrestricted withdrawals’
Ellison and former FTX CTO Gary Wang, whose testimony occurred during the first week of the trial, are two of the prosecution’s key witnesses against SBF. Both held leadership roles at the two companies and were close to the former billionaire.
The two pleaded guilty to committing the fraud that eventually resulted in FTX’s downfall and have been cooperating with the prosecution since the exchange collapsed in 2022.
Wang’s testimony on Oct. 5 revealed that SBF had knowingly allowed “unrestricted withdrawals by Alameda.” Wang also mentioned that SBF managed tasks such as media outreach, lobbying, and nurturing investor relations, while Wang was mainly responsible for the platform’s coding.
He emphasized that the final say —especially in the event of a disagreement — rested only with SBF.
SBF faces severe allegations with seven conspiracy and fraud charges linked to FTX’s collapse. However, he has maintained a stance of innocence — pleading not guilty to all counts brought against him.
The inaugural week of proceedings, which kicked off on Oct. 3, delved into the vanishing of a staggering $8 billion from FTX client accounts.
Apart from Wang’s insights, the week also included opening arguments from both sides and testimony from Adam Yedidia, recognized as a close associate of SBF and a former FTX developer.