© Reuters. FILE PHOTO: Former crypto hedge fund Alameda Analysis CEO Caroline Ellison finds and factors out Sam Bankman-Fried throughout Bankman-Fried’s fraud trial over the collapse of FTX, the bankrupt cryptocurrency trade, at Federal Courtroom in New York Metropolis, U.S., O
By Jody Godoy and Luc Cohen
NEW YORK (Reuters) – Caroline Ellison, the previous co-head of Sam Bankman-Fried’s hedge fund and a pivotal witness in his trial on fraud expenses tied to the collapse of his FTX cryptocurrency trade, is scheduled to retake the stand on Wednesday morning.
Ellison, the previous co-chief government of Alameda Analysis, testified on Tuesday that she was a part of a multibillion-dollar conspiracy led by Bankman-Fried to defraud FTX clients, traders and lenders.
She is one among three former members of Bankman-Fried’s internal circle who’ve pleaded responsible to fraud expenses and agreed to cooperate with the Manhattan U.S. Lawyer’s workplace.
Ellison mentioned the hedge fund took about $10 billion in FTX buyer funds to repay its money owed and make investments. The fund gained the cash by means of a $65 billion line of credit score it had on the trade, and from funds FTX clients deposited into an Alameda checking account when FTX lacked its personal account, she mentioned.
The 28-year-old Stanford College graduate informed jurors Bankman-Fried, her former boss and someday romantic associate, shrugged off the danger of Alameda’s lending and funding methods, which relied on loans from crypto lenders who might demand reimbursement at any time.
“He described himself as actually risk-neutral,” whereas most individuals noticed themselves as risk-averse, she mentioned.
Prosecutors say Bankman-Fried plundered billions in buyer funds to prop up Alameda, purchase actual property and donate greater than $100 million to U.S. political campaigns earlier than FTX declared chapter in November 2022 following a collapse that shocked monetary markets and left his popularity in tatters.
Bankman-Fried has pleaded not responsible to 2 counts of fraud and 5 counts of conspiracy, and has argued that whereas he made errors operating FTX, he by no means supposed to steal funds.
In his opening assertion final week, protection lawyer Mark Cohen informed jurors to query whether or not cooperating witnesses like Ellison have been placing a brand new, nefarious spin on outdated choices by Bankman-Fried which that they had initially agreed with.
Gary Wang, FTX’s former expertise chief, testified that Bankman-Fried falsely tweeted that FTX was “nice” in November because the trade confronted surging demand for withdrawals. A 3rd cooperating witness, former FTX engineering chief Nishad Singh, can be anticipated to testify on the trial, which might last as long as six weeks.
