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Unveiling the emotional and professional entanglement between the former CEO of Alameda and SBF.

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Caroline had documented her relationship with SBF and her conflicting emotions while working at Alameda in a Google document.

Source: David Yaffe-Bellany, Matthew Goldstein

Translation: Luffy, Foresight News

In the months leading up to the SBF case trial (October 2nd of this year), SBF leaked some of Caroline Ellison's (a key witness in the case, SBF's ex-girlfriend, and former CEO of Alameda) private documents to The New York Times. US prosecutors claimed that SBF did this to smear the witness and limit her testimony in court. The New York Times published an article about Caroline Ellison's private documents, mainly discussing her relationship with SBF and her inner conflicts while working at Alameda. Foresight News has compiled and translated the article as follows:

Last year, during the first three months of the cryptocurrency market crash, Caroline Ellison, the 27-year-old CEO of Alameda Research, a cryptocurrency hedge fund, suffered from self-doubt.

Ellison wrote in a Google document in February 2022: "I have always been very unhappy and confused about my work." She added, "At the end of the day, I can't wait to go home, turn off my phone, have a drink, and get away from everything."

Ellison has a lot of thoughts in her mind. In another Google document, she wrote that she doesn't think she's well-suited to manage Alameda, especially as a decision maker. She also had a bad relationship with Sam Bankman-Fried (SBF), the billionaire entrepreneur who founded Alameda and later one of the world's largest cryptocurrency exchanges, FTX. They dated on and off but eventually broke up, mainly because Ellison was worried about "making things weird" at work or "bringing negative consequences".

"Feels like everything has no end in sight," she wrote in her February 2022 document.

Now, Ellison will become the star witness in Sam Bankman-Fried's criminal trial scheduled for October 2nd.

A 31-year-old SBF has been accused of misusing customers' billions of dollars in assets and faces eight charges of fraud and violating election laws. His downfall led to the bankruptcy of FTX and Alameda, and Ellison went from a powerful but relatively secretive figure to the center of a scandal. In December of last year, she admitted to the fraud charges and agreed to cooperate with federal prosecutors investigating her former boyfriend.

The SBF case is about to be finally judged in a Manhattan court. FTX's two other executives, Nishad Singh and Gary Wang, have also pleaded guilty and agreed to cooperate. In June, after weeks of legal debate over the charges against SBF, the judge in the case set a fast timetable for the trial preparation, requiring the prosecutor to provide a witness list and other final materials. Two sources familiar with the matter said that prosecutors are expected to begin preparing some witnesses in August.

As SBF's ex-girlfriend and one of his earliest employees in the cryptocurrency industry, Ellison has a unique perspective on the FTX founder. According to The New York Times and four sources who have reviewed Ellison's documents, she has recorded many of her thoughts in writing, observing her personal and professional life in handwritten journals and Google documents. These documents have been widely circulated among lawyers involved in the case.

These previously unreported documents provide new clues to understanding Ellison's psychological state and changes in the last few months at FTX. The 28-year-old Ellison is a prolific writer, and her posts on Tumblr about Harry Potter and Jane Austen have received widespread criticism. But the Google documents are more private, some of which are directly written to SBF, explaining the complexity of their relationship and her conflicting emotions towards Alameda.

In a Google document written to SBF in April 2022, Ellison wrote that her earlier breakup "greatly reduced my excitement about Alameda." She added that life in a hedge fund "feels too closely connected to you, which is painful."

The representatives of Ellison's legal team and SBF's lawyers declined to comment on this. A spokesperson for the Manhattan U.S. Attorney's Office, which is responsible for prosecuting this case in the Southern District of New York, also declined to comment.

Ellison graduated from Stanford University. She met SBF while working at the quantitative trading company Jane Street after graduation. They are both committed to effective altruism, which has attracted many followers in the technology and finance industries.

After leaving Jane Street to found Alameda in 2017, SBF recruited Ellison as a trader. In 2021, he promoted her to co-CEO, fighting alongside another early employee, Sam Trabucco.

Meanwhile, SBF and Ellison also began an unstable romantic relationship, breaking up and reconciling multiple times. Sometimes, Ellison worries that SBF doesn't think she's good enough. In her Google document in February 2022, she wrote that when he's around, she "has a shrinking instinct, becomes quieter, and becomes more submissive to others."

After a breakup, Ellison cut off contact with SBF. "I felt very sad," she wrote in a Google document in April 2022. "Not contacting you is the only way for me to regain a sense of strength."

The founder of Alameda and FTX, Sam Bankman-Fried, was in his office in Hong Kong in 2021.

As of last year, SBF has become one of the most famous cryptocurrency entrepreneurs in the world, with his photos often appearing on billboards and magazine covers. His fame seems to have made Ellison's life at FTX and Alameda more difficult.

She wrote in her April 2022 document that staying in Alameda means "having to be by your side all the time, constantly hearing people talk about how great you are."

Ellison's salary is far less generous than that of other executives at FTX and Alameda, but it is unclear whether she is aware of this. According to court documents, the exchange's founders and other key employees received $3.2 billion in payments and loans. Ellison received $6 million, while FTX engineering director Mr. Singh received $587 million, co-founder Mr. Wang received $246 million, and SBF received $2.2 billion.

In May 2022, the cryptocurrency market crashed and several well-known companies went bankrupt. Regulatory agencies claimed that during the crisis, SBF, Mr. Wang, Mr. Singh, and Ellison used billions of dollars of customer funds deposited into FTX to fill the hole in Alameda's account.

Even before this, Ellison doubted her own abilities. In a document from April 2022, she listed the difficulties she encountered, including "leadership" and "decision-making".

"Managing Alameda doesn't feel like something that I have a relative advantage or suitability for," she wrote.

Until last autumn, SBF lost confidence in Alameda. According to court records, he considered shutting down the company and invested over $400 million in another trading firm, Modulo Capital, led by a former Jane Street trader whom SBF had met before.

Two people who have read the Ellison document said that she expressed jealousy and resentment towards Modulo in some of her works, as well as a feeling of being excluded.

SBF's commercial empire collapsed in November due to a bank run, exposing a deficit of $8 billion.

Last December, SBF was arrested at the Bahamas, where FTX headquarters are located, and was taken to a nearby prison not far from his luxury apartment. Prior to this, SBF lived in this luxurious top-floor apartment with Ellison and eight other roommates. Currently, SBF is under house arrest at his parents' home in Palo Alto, California.

People who know Ellison say they are shocked by her honesty in admitting her own shortcomings. In December, she apologized for her fraudulent behavior in court, saying "I know this was wrong."

It is expected that Ellison will repeat this statement during the trial of SBF, which will last for four to five weeks. Two sources familiar with the matter said that much of the trial will revolve around messages sent on the messaging application Signal by SBF and three collaborators.

Lawyers familiar with the case say that as a woman in the male-dominated cryptocurrency industry, Ellison may be more likely to gain sympathy from the jury than other collaborators. In an interview last year, SBF blamed Alameda for the collapse of FTX, saying he was hardly involved in the day-to-day management of Alameda.

Former federal prosecutor Moira Penza stated that the best government collaborator accepted the accusations on the witness stand, and the "power difference" between Ellison and SBF may allow her to make a convincing argument.

"In my opinion, this is not an effective strategy for the defendants," Penza said. "Especially for people who were once romantic partners."