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Caroline Ellison Begins Star Witness Testimony in SBF Trial

Tensions were high in Manhattan Federal Court Tuesday as former CEO of Alameda Research, Caroline Ellison, began her star witness testimony against Sam Bankman-Fried

The petite, glasses-wearing Ellison took a decent amount of time to identify the defendant in the courtroom. 

With only 15 minutes of testimony completed before Judge Lewis Kaplan ordered the court to break, it is clear already that the ex-girlfriend of Bankman-Fried’s strategy is to heavily place the weight of criminal responsibility on him. 

When asked if she herself committed any crimes, Ellison replied, “Yes, we did.” When asked if she committed these crimes alone, Ellison responded, “No, they were committed with Sam.”

“(Bankman-Fried) was the CEO then owner of Alameda, and he directed me to commit these crimes,” Ellison stated. She then noted that Alameda Research “ultimately took $14 billion, some of which we were able to pay back.” 

Ellison drew up deliberately incorrect balance sheets

Ellison admitted to producing incorrect balance sheets of Alameda Research’s finances to make investing in the company look “less risky than it really was.” 

However, she deflected ultimate responsibility back to Bankman-Fried, stating “he was the one who set up these systems to take customer money.”

Ellison’s blockbuster testimony is expected to be a significant part of the prosecution’s case. It comes after FTX co-founder, Gary Wang, wrapped up his grueling three-day-long testimony early this morning.

The defense seemed to try to establish Wang as having been influenced by the prosecution to provide a specific testimony, pointing out his willingness to work with the government shortly after FTX collapsed. 

However, the prosecution argued that Wang had admitted to committing the crimes even before he agreed to cooperate with them.

Currently, Wang has pled guilty to wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit commodities fraud. He faces 50 years if convicted on all counts. However, his cooperation agreement could provide him with a significantly reduced sentence.

Ellison has pled guilty to seven charges

Meanwhile, Ellison has pleaded guilty to seven different federal fraud charges that could land her in prison for up to 110 years. However, like Wang, Ellison is testifying under a cooperation agreement in hopes of a lesser sentence.

Ellison’s testimony comes after a gripping first week in the trial of Bankman-Fried, who himself faces up to 110 years in federal prison. 

The prosecution has consistently presented a strong case against the defendant, providing clear and concise evidence to support the claim that he defrauded billions of dollars from FTX users. 

Meanwhile, the defense has struggled to produce a cohesive argument against the prosecution’s witnesses, with Judge Kaplan going so far as labeling their line of questioning as “endlessly repetitive.”

It is currently unclear whether or not Bankman-Fried will take the stand in his own defense. The trial is expected to last through the second week of November.

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