SBF’s ex-girlfriend Caroline Ellison takes the stand as government’s star witness

Caroline Ellison, the government's star witness in its criminal case against the disgraced former CEO of bankrupt crypto exchange FTX, is expected to take the stand on Tuesday, as the criminal trial of Sam Bankman-Fried resumes in a downtown Manhattan courthouse.

Ellison, who ran FTX's sister hedge fund Alameda Research, pleaded guilty in December to two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering.

Part of Ellison's plea deal with the government has involved cooperating with the prosecution's case against Bankman-Fried, similar to the arrangement struck with Gary Wang — the lesser-known co-founder of FTX and Alameda, whose cross-examination picks up at 9:30 a.m.

Ellison offers a unique view of the defendant, having been one of the company's earliest recruits in 2017. Bankman-Fried had reportedly convinced the Stanford grad to ditch her Wall Street trading job at Jane Capital to join Alameda as a trader, back when the hedge fund was still in its original office in the San Francisco Bay area. Ellison also spent years as Bankman-Fried's on-again, off-again girlfriend and, at times, his roommate.

U.S. Attorney Thane Rehn teed up Ellison's prospective testimony in his opening statement to the jury last week, saying that Bankman-Fried "was using her as a front" when "in reality, he was still calling the shots at Alameda."

Rehn went on to allege in his opening that it was Bankman-Fried who had concocted a "scheme to take money from FTX and give it to Alameda" and that Ellison would share the details of how she and her former lover stole customer money from FTX and deployed that cash through Alameda.

Meanwhile, Bankman-Fried's lead defense attorney Mark Cohen spun a far different narrative in his opening remarks in court, casting Ellison as a leader who held firm control over the firm and whose leadership ultimately ran the company into the ground.

In Cohen's recounting of events, Bankman-Fried had urged his former deputy at Alameda to "put on a hedge," but "she didn't do so at the time."

Noticeably absent thus far in proceedings is the mention of Ellison's co-CEO Sam Trabucco, who was a classmate of Bankman-Fried at MIT. Trabucco left Alameda in Aug. 2022 and has stayed relatively under the radar.

For months, the 28-year-old has been the subject of mass speculation, as her private writings and public posts have been scrutinized by the press — and by criminal attorneys.

Ellison has tweeted about "regular amphetamine use," reportedly journaled on Tumblr about her own exploration into polyamory, and in Michael Lewis's new book about the rise and fall of Bankman-Fried, extensive business-like memos written by Ellison to Bankman-Fried shed new light on their beleaguered romance.

"Caroline sensed that, even as Sam promoted her to CEO of Alameda Research, he disapproved of her job performance — and she shared his opinion," Lewis wrote in his book.

Lewis went on to share an excerpt from one of the memos that Ellison had sent to her boss and boyfriend: "It feels like I'm doing a much worse job managing Alameda than you would if you were working on it full-time," she wrote. "I'm going to fuck up important things if you don't step in sometimes," continued the excerpt from Ellison's memo shared in Lewis's book.

The former Alameda exec had followed Bankman-Fried from California, to Hong Kong, and ultimately, to the Bahamas, as Bankman-Fried repeatedly shifted headquarters for his crypto companies. Lewis's reporting includes speculation that Bankman-Fried's departures from each city coincided with relationship troubles with Ellison.

In July, the New York Times published a report with private diary entries of Ellison leaked to the publication by Bankman-Fried, an act which ultimately landed him back in jail after Judge Lewis Kaplan revoked his bail for alleged witness tampering.

In a Google document from Feb. 2022 shared with the Times, Ellison wrote, "I have been feeling pretty unhappy and overwhelmed with my job...At the end of the day I can't wait to go home and turn off my phone and have a drink and get away from it all."

She added, "It doesn't really feel like there's an end in sight."

Ellison's insecurities both regarding her relationship with Bankman-Fried and in her role as the top leader at Alameda are chronicled extensively in Lewis's reporting and in the leaked diary entries.

Court filings show that Ellison's compensation paled by comparison with other executives in Bankman-Fried's crypto empires. Of the $3.2 billion that went to the exchange's founders and other top employees, $6 million went to Ellison, versus $587 million to FTX's head of engineering Nishad Singh, $246 million to Wang and $2.2 billion to Bankman-Fried.