Ellison’s tell-all meeting with Alameda employees ‘was kind of fun’

Caroline Ellison told most employees about Alameda’s under-the-table borrowing habits for the first time just days before the two companies filed for bankruptcy, jurors learned Thursday


Artwork by Crystal Le


Caroline Ellison has left the courthouse after three days of testimony, but her voice is still being heard. 

After a shorter-than-expected cross-examination of its star witness, the government was handed another win Thursday afternoon in Sam Bankman-Fried’s criminal trial: permission to play secretly-recorded audio from an internal Alameda Research meeting. 

“[Alameda] ended up, like, borrowing a bunch of FTX funds,” former Alameda CEO Caroline Ellison said on the recording, which was played during witness testimony Thursday afternoon. “I’m not even sure if I know exactly who was aware.” 

In the recording, Ellison was speaking from the Hong Kong office in November 2022, days before FTX and Alameda filed for bankruptcy, according to government witness Christian Drappi, a former Alameda software engineer. 

Drappi said another then-Alameda trader, one who had only worked there for three days prior to the meeting, made the recording. 

Ellison previously testified that she did host a meeting with all Alameda employees from the Hong Kong office in November 2022 where she told other employees for the first time that Alameda had taken FTX customer money to repay its loans. 

“FTX, like, basically always allowed Alameda to, like, borrow user funds,” Ellison said in the recording. 

Read more: White-collar defense lawyer weighs in on SBF trial: ‘If I had to place a wager…’

The prosecution asked Judge Lewis Kaplan’s permission to introduce the audio clips which were recorded during the infamous “all-hands meeting” after Ellison, who served as the government’s fifth witness across three days of testimony, left the stand for the last time Thursday afternoon. 

Sam Bankman-Fried’s attorneys and the prosecution went head-to-head to argue their stances on whether or not the recordings could be played for the record.

In the end, Kaplan opted for a slight compromise: The government could play their six clips and the defense could play one – from the same meeting – after the government. 

Drappi, who was in the room at the Hong Kong office with Ellison during the meeting, was the government’s next witness and on the stand while the recordings were played to the court. 

Drappi was heard on the recording asking Ellison if there was a “plan” on how to repay the billions Alameda had borrowed from FTX customers. Ellison, on the recording, said there had been efforts to raise outside capital. 

“Generally when a company tries to raise money… [it’s] not to try to fill a hole in the balance sheet,” Drappi said during his testimony, after the jury heard the recording. 

The defense played their selected clip, which painted Ellison’s demeanor at the time in a different light, during cross examination. 

In this final clip played to the jury, an employee is heard telling Ellison that they appreciate her transparency in coming clean about the loans Alameda received. 

“Thanks,” Ellison responded on the recording, while laughing. “I mean, it was kind of fun.” 

Bankman-Fried’s criminal trial continues in Manhattan Friday. The FTX founder faces seven charges of fraud and conspiracy.

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