FTX Deputy Testifies

Caroline Ellison, the former CEO of cryptocurrency hedge fund Alameda Research, testified in New York yesterday in the criminal fraud case against FTX founder Sam Bankman-Fried. Ellison, who pleaded guilty to seven charges in December, is cooperating with the prosecution.

The 28-year-old Ellison has revealed she was a key participant in the scam (see explainer), which led to the exchange's sudden downfall in November. Prosecutors have positioned her as their star witness, as she was both Bankman-Fried's top deputy and on-and-off girlfriend. Bankman-Fried has pleaded not guilty to all charges, including a separate campaign finance case set for March 2024.

Ellison claimed Bankman-Fried schemed to use billions of dollars of FTX deposits—in the exchange's native currency, FTT—to pad Alameda's balance sheet to better attract lenders to the exchange. She also shared details of their relationship, her compensation, and some of Bankman-Fried's political views. See highlights here.

If convicted, Bankman-Fried could be sentenced to life in prison.