Former Alameda Research CEO and star witness Caroline Ellison today took the stand against alleged crypto crook Sam Bankman-Fried and told the jury that he directed her to commit crimes.

Bankman-Fried's ex-girlfriend, who in December admitted fraud related to the collapse of crypto exchange FTX, also told the courtroom that Bankman-Fried was the one "who set up the system to allow Alameda to take money."

"He directed me to commit these crimes," Ellison said in her brief 15 minute appearance before the trial broke for lunch. "Alameda took several billions of dollars from FTX customers and used it for investments," she said.

She went on to say that Alameda tool $14 billion worth of FTX customer funds total, using $10 billion worth of the money to repay its lenders. Ellison said the firm was able to repay a portion of the funds it took from FTX.


When her testimony resumed after a recess for lunch, Ellison talked about the risk assessments she did to figure out how Alameda Research could get out of debt.

"I thought Alameda's position was risky," she recalled in court, saying that she didn't think the firm's balance sheet would inspire confidence in lenders. She added Bankman-Fried suggested adding Paper Bird, a company under which Sam held shares in FTX, could be added to the balance sheet to make Alameda look less risky than it was.

Paper Bird Inc. is one of the many FTX-owned companies that was included when the firm filed for Chapter 11 bankruptcy protection in November 2022. When the firm did submit its bankruptcy protection petition, it showed that Paper Bird Inc. owed Alameda Research $2.3 billion.

Screenshot of FTX's Chapter 11 bankruptcy petition.
Source: Screenshot of FTX's Chapter 11 bankruptcy petition.

While performing a risk assessment, Ellison testified that she estimated Alameda would have a "30% chance" of being able to repay all its loans during a market downturn. But with $3 billion illiquid in venture investments, she gave the company a 100% chance of not being able to repay its loans—even with access to FTX customer funds.


Alameda Research was a trading firm founded by Bankman-Fried. Prosecutors allege that Bankman-Fried deceived customers by pinching money from FTX to make risky trades on Alameda.

Prosecutor Thane Rane said during his opening remarks that Caroline Ellison was named as CEO but Bankman-Fried was the one "calling the shots at Alameda"—and that Ellison was really just a "front."

Ellison had a fascination with race science and polyamory, and wrote about such topics on Tumblr, Decrypt previously reported.

In private writings, Ellison said it was a good thing the FTX empire collapsed—and admitted she wasn't up to the task of running Alameda, according to the New York Times.

Bankman-Fried was arrested a month after his crypto behemoth filed for bankruptcy. FTX, once the most recognized brands in the crypto space, quickly and unexpectedly went bankrupt last November.

He is now facing seven criminal charges and his trial is expected to last six weeks.

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