Caroline Ellison's Cryptic Move Against Sam Bankman-Fried

• FTX's Collapse and its Aftermath
• Caroline Ellison's Role
• Testimony Details
• Impact on FTX and Alameda
• Personal Interactions and Relationship with Bankman-Fried
• The Aftermath

FTX's Collapse and its Aftermath

The demise of crypto exchange FTX$3.28 -5.38% in November 2022 has been partly attributed to a tweet from Caroline Ellison, CEO of Alameda Research. If you're looking to minimize the market impact on your FTT sales, Alameda will happily buy it all from you today at $22!, she posted. This move heavily influenced the market, contributing to the plummeting value of FTT, FTX's exchange token, and leading to bankruptcy filings from both FTX and Alameda.

Caroline Ellison's Role

Ellison, who is also a key associate of Sam Bankman-Fried, founder of both FTX and Alameda, found herself in the spotlight when she had to testify against her former boss in court. She admitted to committing fraud, laundering money, and conspiring to defraud FTX's customers and investors, as well as Alameda's lenders. Ellison confirmed that these crimes were carried out in tandem with Bankman-Fried.

Testimony Details

Appearing as a vital witness in one of the most significant fraud cases to go to trial, Ellison revealed how she, as part of a four-person team, misappropriated funds for gambling, real estate purchases, and influencing U.S. elections and regulations.

Impact on FTX and Alameda

Ellison's testimony generated a considerable amount of attention, given her prominent role in FTX - one of the most recognized faces after Bankman-Fried himself. Her revelations led to increased attendance at the courthouse in lower Manhattan.

Personal Interactions and Relationship with Bankman-Fried

Ellison and Bankman-Fried first met at Jane Street, a Wall Street quant fund reputed to hire only the top-tier talent. Despite having little knowledge about crypto at the time, she was convinced by Bankman-Fried to join his private venture, Alameda, making her one of the firm's first hires.

Over time, Ellison learned how to use the MetaMask wallet, particularly during the DeFi Summer of 2020. However, as things started to deteriorate, Bankman-Fried criticized her for not hedging her bets. He went on to start a venture fund, against her advice, which she believed would lead to their bankruptcy.

The Aftermath

Throughout the whole saga, Ellison was known as the individual in charge of Alameda. However, in her court testimony, she claimed that she was not really in charge of anything. While others in the inner circle had equity in Alameda, she did not. Her journey with Alameda started with research and working on trading models, monitoring automated systems, and handling Bitcoin$42,260 -0.64% transactions across various exchanges.

With Bankman-Fried now potentially facing a long prison term, Ellison's narrative is bound to change, given her likely much softer sentence.

Edited by Jonathan Stoker