Image: APA/AFP/ED JONES
Caroline Ellison, former head of Bankman-Fried’s Alameda brokerage and former partner of the 31-year-old, described the defendant as an ambitious man in a New York court on Tuesday (local time).
He had no qualms about giving misleading financial information to lenders, got involved in the rivalry with the crypto exchange Binance and believed he could one day become US president.
“Use money to pay off our debts”
“Alameda withdrew billions of dollars of money from FTX customers and used it for our own investments and to repay our debts,” she said. Bankman-Fried also ordered her to present a misleading Alameda balance sheet to lenders. When asked by a prosecutor whether she had committed crimes, the 28-year-old replied: “Yes, we have.”
Alameda first used the FTX credit line in 2021, she added. Bankman-Fried wanted to buy back Binance’s billion-dollar stake in FTX because he feared that the rival would affect business. Binance could not immediately be reached for comment on this topic. The world’s largest crypto exchange expressed interest in taking over FTX last November, but then decided against it. Ellison is expected on the witness stand again on Wednesday.
Secretly moved billions
Last week, former FTX technical director and co-founder Gary Wang had already incriminated Bankman-Fried. Nishad Singh is also expected to testify as a third former confidant in the course of the proceedings. Ellison, Wang and Singh pleaded guilty at a hearing and said they would cooperate with prosecutors.
According to authorities, Bankman-Fried secretly moved billions to speculate and finance his lavish lifestyle. He has repeatedly denied all fraud allegations and pleaded not guilty. However, he admitted mistakes in the company’s management. The process is scheduled to last six weeks. If convicted, Bankman-Fried could face up to 115 years in prison.
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