Alameda Research’s former CEO claims she was pressured by SBF to commit fraud and money laundering

Ellison, the former head of Alameda Research, claims that SBF pressured her to provide false financial data to investors in order to launder money and conduct fraud.

Former Alameda Research CEO Caroline Ellison testified against current defendant and ex-FTX CEO Sam Bankman-Fried (SBF). Ellison, the prosecution’s sixth witness, said that SBF had urged her to launder money and conduct fraud.

In his testimony, Ellison makes many accusations against her, including that she used client money to finance other initiatives. She also mentioned a “essentially unlimited line of credit” for repaying obligations to lenders, which Ellison said was used.

Ellison said that she and SBF dated intermittently for many years. She vouched for SBF by saying that she had met him before during her internship at Jane Street, a quantitative trading business. According to Ellison, SBF was instrumental in getting her to abandon Jane Street and join his crypto initiatives. Since the FTX crash in November of last year, communication between Ellison and SBF has been minimal.

According to Alameda Research’s former CEO, the business borrowed $14 billion from its clients but could only pay back a fraction of that amount. Donations to political campaigns and acquisitions of real estate were made with some of the money SBF stole.

She further claimed that she was instructed by SBF to alter financial statements and provide fabricated data to potential lenders and investors. This was done to improve Alameda Research’s image in the eyes of potential backers. Along with other FTX executives including Director of Engineering Nishad Singh and Co-Founder and Chief Technology Officer Gary Wang, she pled guilty to several crimes and accepted plea deals.

On October 1st, Gary Wang testified, confessing he and Ellison and Sing had committed crimes. At trial, the company’s ex-CTO claimed that FTX was granted “special privileges” by Alameda Research. AUSA Danielle Sassoon’s query was answered by Wang, who said that FTX “allowed Alameda to withdraw unlimited funds.”

Wang said that SBF was responsible for all external communications and engagements, including with investors, the media, and lobbyists. He continued by saying that although SBF didn’t write any code himself, he did instruct Wang and the team on how to proceed.

The former CTO pled guilty in December and agreed to testify as part of his sentence. The federal court in the Southern District of New York accepted guilty pleas from both Wang and Ellison on fraud counts.

Also Read: Israel Bans Cryptocurrency Exchange Binance Over Hamas Links