Caroline Ellison, former CEO of Alameda Research and business associate of Sam Bankman-Fried, testified in the  ex-FTX CEO’s fraud trial on Oct. 10.

SBF for USA

In addition to detailed testimony concerning crimes allegedly committed by and at the direction of Bankman-Fried, Ellison also described aspects of their personal intimate relationship in 2020. She testified that during this time, Bankman-Fried confided personal and political ambitions to her:

Assistant U.S. Attorney (AUSA): “What did [Bankman-Fried] tell you about his ambitions?”
Ellison: “That he would be President.”
AUSA: “Of what?”
Ellison: “The United States.”

Elsewhere in her testimony, Ellison noted that various associates spent borrowed money on political donations. She testified that FTX DM CEO Ryan Salame spent $35 million of borrowed funds on Republican donations. She also said that Bankman-Fried donated $10 million to Joe Biden’s campaign, adding: “he thought it bought him access.”

Though it is unclear how this testimony will affect current proceedings, prosecutors intend to charge Bankman-Fried with campaign financing crimes at a later date.

Fraud testimony

Ellison testified at multiple points that Bankman-Fried directed her to commit crimes. She pleaded guilty to taking billions of dollars from FTX users for Alameda’s own use.

She went on to state that Bankman-Fried set up the systems that allowed Alameda Research to take the money and told the company to do so, while she herself sent balance sheets that made Alameda appear to be less of a risk than it actually was. She admitted that FTX did not have enough money to meet user withdrawals in 2022 because Alameda had taken that money to repay its own lenders.

Ellison said that Alameda received between $10 billion and $20 billion dollars from FTX and third parties. She added that Alameda spent $2 billion of that amount to repay loans, make investments, and carry out stablecoin conversions. She said that the rest of the money was used for Alameda’s own purposes and other purposes.

Ellison testified that she was concerned that FTX customers were unaware that their funds were being used by Alameda, but said that she was “just a trader at the time.” She said that, in 2020, she brought the issue up with Bankman-Fried, who she said assured her that auditors would not look at those transactions.

Ellison described the same unlimited borrowing policy that FTX co-founder and ex-CTO Gary Wang reported in his own testimony. Ellison said that Alameda had had a line of credit on FTX that allowed it to withdraw coins even if it did not have those assets. She affirmed that Alameda would only have needed up to $200 million.

Ellison remained on the witness stand at the time of publication. CryptoSlate’s coverage of testimony in the Bankman-Fried case will continue.