Sam Bankman-Fried trial: confidant Caroline Ellison faces cross-examination

Sam Bankman-Fried's confidant Caroline Ellison took the stand again at the FTX founder's trial on Thursday, where she could face questions about why she cooperated with prosecutors against her former boss and romantic partner.

Ellison, the former co-chief executive of Bankman-Fried's crypto hedge fund Alameda Research, has been on the stand since Tuesday detailing her role in a multibillion-dollar fraud prosecutors say was orchestrated by Bankman-Fried at his now-defunct cryptocurrency exchange.

Over two days on the stand, Ellison, who took the reins at Alameda in 2021, testified that the hedge fund took $10 billion in FTX customer funds to repay its debts and make investments.


Ellison said through tears that she lived in "dread" the truth would come out, and that FTX's ultimate collapse last year brought an "overwhelming feeling of relief."

Bankman-Fried's attorney Mark Cohen began by asking Ellison about the internal account FTX used to denote customer funds deposited into Alameda bank accounts. Before his arrest, Bankman-Fried blamed the shortfall on poor internal labeling of the account, called "fiat@ftx.com."

Prosecutors say Bankman-Fried, 31, plundered billions in customer funds to prop up Alameda, buy real estate and donate more than $100 million to U.S. political campaigns. FTX collapsed and declared bankruptcy in November 2022, shocking financial markets and destroying Bankman-Fried's reputation.

Bankman-Fried has pleaded not guilty to two counts of fraud and five counts of conspiracy, and has said that while he made mistakes running FTX, he never intended to steal funds.

Ellison, a 28-year-old Stanford University graduate, is one of three former members of Bankman-Fried's inner circle who have pleaded guilty to fraud charges and agreed to cooperate with the Manhattan U.S. Attorney's office.

Earlier in the trial, Gary Wang, FTX's former technology chief, testified that Bankman-Fried falsely tweeted that FTX was "fine" in November as the exchange faced surging demand for withdrawals. A third cooperating witness, former FTX engineering chief Nishad Singh, is also expected to testify at the trial, which could last up to six weeks.