FTX Trial Update: Caroline Ellison Weeps in Court, Blames Sam Bankman-Fried for “Bad Idea”

  • Co-founder and CEO of Alameda Research, Caroline Ellison was the star witness on the third day of testimony at the historic criminal conspiracy fraud trial. 
  • Caroline stated that she initially thought FTX was a “Bad Idea”, but Sam Bankman-Fried (SBF)was prepared “to take risks she wouldn’t have”. 
  • SBF’s attorney, Mark Cohen, started the first round of questioning to bolster the argument that Ellison — not Sam Bankman-Fried — was in charge at Alameda Research.

Caroline Ellison took the stand on the third day in the criminal trial involving FTX founder and CEO Sam Bankman-Fried. The latest from the court shows SBF’s attorneys attempt to create a separation between FTX exchange and its parent company, Alameda Research’s daily operations. 

Sam Bankman-Fried’s Defense Team Calls up Caroline Ellison for Cross-Examination

On Thursday, former Alameda Research CEO Caroline Ellison was cross-examined in the criminal fraud trial against her ex-boyfriend, FTX co-founder Sam Bankman-Fried.

The SBF’s defense team appeared focused on drawing a line between SBF’s duties as CEP of FTX and the illegal activity carried out by Alameda Research.

Caroline Ellison Testifies Against SBF during FTX Trial, October 2023.

Ellison took the stand around 9:40 a.m. on Thursday dressed in a wine-colored dress and dark blazers. Sam Bankman-Fried’s attorney, Mark Cohen, began the questioning, asking about the names and purposes of different bank accounts Alameda held.

The defense, made clear attempts to bolster the argument that Ellison — not Bankman-Fried — was responsible for Alameda, asking if there were times when he was absent from its daily operations.

Ellison responded saying “There were periods of time when he wasn’t paying attention to Alameda or interacting with the firm’s executives”

Bankman-Fried maintains that has did not knowingly committing any crimes. To this effect he and his legal team attempt to establish in court that his ex-girlfriend, Ellison was primarily responsible for Alameda’s catastrophic borrowing and that his only mistake was failing to pay closer supervisory attention to what was happening. 

Caroline Ellison Pins More Blames on Sam Bankman-Fried

Cohen continued questioning Ellison about her professional views on Bankman-Fried, whom she had described as “ambitious” and a hard worker. 

In response, Ellison stated that Bankman-Fried knowingly took risks she wouldn’t have, including starting FTX, which she intitaly thought was a bad idea. 

Caroline Ellison arrives at court for FTX Trial | Oct. 12. Source: Stephanie Keith/Bloomberg

Ellison that also added she thought SBF would have a difficult time attracting customers and that it would be a waste of time. The FTX exchange was founded in 2019 and once valued at $32 billion at its peak. 

She also agreed that she and Bankman-Fried had different ways of handling stress, after previously testifying about how taxing her role at Alameda could be.

While FTX co-founder Gary Wang, and the company’s former director of Engineering Singh Nishad —have pleaded guilty for their role in the alleged crimes and are cooperating with prosecutors in the ongoing criminal trial, Ellison is yet to follow suit. 

Earlier in the trial, Ellison had detailed how she worked with Bankman-Fried to falsify details surrounding  health of Alameda and FTX  exchange to deceive lenders and customers. 

She also testified that she falsified Alameda Research’s  balance sheets, on behalf of Bankman-Fried, to conceal that the firm was taking large sums of fund belonging to FTX customers.

It remains to be seen how her own defense team will file a plea in the days ahead.