SBF's ex-girlfriend appeared in court, what insider information did she reveal?

Below is the main content of Caroline Ellison's testimony on the first day of the trial regarding the FTX case at SBF, who was the former CEO of Alameda Research on Tuesday. The content has been compiled and translated by BlockBeats.

SBF admits to committing all crimes

Caroline Ellison was well prepared in her testimony and firmly believed that SBF was a co-conspirator in the massive fraud case involving FTX and Alameda Research. During her testimony, Caroline stated, "Alameda took billions of dollars from FTX customers and used it for their own investments. In the end, we took approximately $1.4 billion, some of which we have the ability to repay. SBF was initially the CEO of Alameda and its owner, and he instructed me to commit these crimes."

Caroline admitted to seven charges last December, but at the time SBF denied all allegations against him.

SBF maintains distance from Alameda externally, but often guides Caroline in making decisions

Like the testimony provided by FTX co-founder Gary Wang, Caroline claims that SBF is the ultimate decision maker of the FTX empire. Although she is fully aware that Alameda is taking funds from FTX customers and has almost unlimited credit on the cryptocurrency trading platform. While SBF publicly distances himself from Alameda and claims not to manage the company, Caroline says that SBF guides her on how to handle the FTT tokens held by Alameda and its venture capital, as well as other important business decisions.

Caroline said: "Sam instructed us to borrow as much money as possible, which is something he often talks about. Sam has said that he wants to buy more (FTT)... because he doesn't want any of our loans to be at risk, putting FTT tokens on the balance sheet may be misleading."

In addition, when Alameda encountered difficulties in attracting new lenders, Caroline testified that SBF created the FTT token and provided approximately 60-70% of the FTT tokens to Alameda for free. SBF also instructed Caroline to secretly purchase FTT if it fell below $1 (which he believed was a "psychologically important level"), without discussing the purchase with employees. With the receipt of FTT, Alameda was able to obtain regular loans from lenders such as Genesis.

"Alameda used FTT as collateral for loans and borrowed billions of dollars from Genesis."

SBF underestimated market risks and still hopes to invest heavily

Caroline emphasized in the accusation SBF's huge appetite for risk. Caroline stated that when analyzing the potential danger that Alameda faced due to the unpaid loans of the cryptocurrency lending institution Genesis and the possible downturn of cryptocurrency assets, SBF often dispelled her concerns and made her adjust her calculations to make these situations more acceptable. She pointed out that although this brought significant risks to Alameda, he still wanted to continue with a $3 billion risk investment.

SBF buys $600 million worth of Robinhood shares as Alameda places the order

She also delved into the fact that SBF purchased over $600 million worth of shares in Robinhood Markets Inc. in May 2022. She stated that these shares were paid for by Alameda, but when it came time to publicly disclose the purchase, SBF requested that the ownership be transferred to another FTX entity because he did not want to be associated with Alameda. This acquisition once again demonstrates that Bankman-Fried continues to be involved with Alameda, despite claiming to have almost no relationship with the company.

Caroline's Dual Relationship with SBF

The on-and-off romantic relationship between SBF and Caroline was also mentioned. She talked about the difficulty of reporting work directly to her boyfriend and pointed out that he could fire her at any time.

"Throughout our entire date, he was also my boss at work, which caused some awkward situations," she said, adding that SBF often seemed distracted and didn't give her enough attention. With Caroline's private diary falling into the hands of the authorities and her continued testimony, these tense situations for Caroline personally may arise again.

Other

The prosecutor also clarified several surprising statements about SBF made by Caroline. Caroline testified that SBF had once stated that his chances of being elected president one day were 5%. (SBF likes to view the occurrence of things from a probabilistic perspective and had participated in hearings on behalf of the cryptocurrency industry several times before the FTX incident.)

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