(New York) Sam Bankman-Fried’s defense was further weakened on Wednesday by the testimony of his former girlfriend and employee, who portrayed the former cryptocurrency superstar as the initiator of the excesses that led to to the loss of its FTX platform.
After having already overwhelmed him, on Tuesday, Caroline Ellison delivered new details on the management of “SBF”, which present the young entrepreneur as involved in all major decisions and very aware of the financial situation of his companies.
Sam Bankman-Fried was a principal shareholder in the cryptocurrency exchange FTX and an investment company, Alameda Research.
In 2021, he entrusted the reins of the latter to Caroline Ellison, but continued to make regular arbitrations on the conduct of Alameda’s activities and to inquire about his state of health, according to several witnesses, while the accused claims to have distanced himself.
Co-founded in 2019 by Sam Bankman-Fried, FTX filed for bankruptcy in November 2022 after many customers learned that their funds had been used, without their knowledge, by Alameda to finance various, mostly high-risk, activities and asked to recover their stake.
Alameda withdrew up to approximately $14 billion from FTX customer accounts without their authorization and without informing them, with some $8 billion missing at the time of the bankruptcy filing.
According to Caroline Ellison, in June 2022, when the cryptocurrency sector was going through severe turbulence, Sam Bankman-Fried asked her to repay, using FTX client accounts, billions of dollars in loans obtained by Alameda from creditors in the digital currency sector.
The former leader of Alameda assured that she had expressed reservations to “SBF”, which did not take them into account. “I was constantly worried that people were going to learn the truth and that customers were going to withdraw too much money at once,” causing the platform to collapse, she said in Manhattan federal court .
The young woman, who became a manager at just 27 years old, also claimed that the accused had asked her to draw up false balance sheets, to present to Alameda’s creditors to hide the real situation of the investment company from them.
At that time, Caroline Ellison said she expressed concern to Sam Bankman-Fried that certain decisions were against the law.
The person responded that he was utilitarian, a doctrine which evaluates the actions of each person in relation to their ability to increase collective well-being.
He was “trying to act for the common good,” the witness explained, and “he said he didn’t think the questioning about lying or stealing was relevant in this context.”