Caroline Ellison got $20M bonus in 2021: SBF live trial updates

The former Alameda CEO also testified that Sam Bankman-Fried aspired to become president of the United States


Artwork by Crystal Le


FTX co-founder Sam Bankman-Fried faces seven federal charges in a criminal trial taking place in Manhattan. The former crypto exchange exec is accused of misappropriating billions of dollars of customer funds for real estate, donations, political contributions and investments. 

The current state of play: Bankman-Fried’s team is set to continue their cross-examination of FTX co-founder Gary Wang. Last week, the judge was visibly irritated with the defense’s approach to cross-examinations, considering it very repetitive. After Wang’s examination is over, prosecutors are expected to name Caroline Ellison to the stand.

4:55 pm ET: Sam Bankman-Fried’s presidential ambitions

A few revelations came to light today as Caroline Ellison’s testimony continued. 

One such revelation is the fact that Bankman-Fried aspired to be president of the United States. A missed opportunity for the crypto tycoon. SBF, to be fair, thought he had a 5% chance of becoming president, according to Ellison.

It’s important to add that money buys a lot of things, though it’s still unclear if the US presidency is included there.

Ellison said that, in 2021, she created an analysis of scenarios wherein Alameda Research spent $3 billion towards venture investments. Alameda’s balance sheet, however, was mostly made up of illiquid coins including FTT — FTX’s native token — cream (CRM) and solana (SOL). 

There was a very big (let’s just say it: 100%) chance of Alameda not being able to meet its loans if a bad market scenario arose. And, yep, they did still plan to use customer funds.

If that doesn’t sound terribly spicy to you, you aren’t alone. SBF’s dad was looking at the clock around 4 pm as well.

By the end of Ellison’s scenario testimony on Tuesday, Blockworks opinion editor Molly Jane Zuckerman had this to say: “The only important point here is to underline how natural it was for FTX customer funds to be fully accessible for Alameda to borrow.”

The prosecutors plan to call BlockFi’s Zac Prince to the stand after Ellison, though they added that Ellison will be the longest-speaking witness. Right now, it’s unclear exactly when Prince will be called to testify.

1:25 pm ET: Caroline Ellison takes the stand 

The trial entered a new phase as Caroline Ellison took the stand today.

When asked to identify Sam Bankman-Fried, Ellison took some time — a solid 45 seconds — before pointing him out. Laughter was heard in the gallery. As she peered over the row of prosecutors past to the defense, she had a slight smile at times.

“He’s over there,” she eventually said, pointing. “Wearing a suit.” 

(Perhaps she’s just not used to seeing her ex-boyfriend in a suit or with a shorter haircut?)

Ellison told the courtroom that SBF directed her to commit crimes, admitting that she pleaded guilty to four federal offenses. Ellison is the former CEO of Alameda Research, the trading and investment firm closely linked to FTX. 

“Alameda took several billion dollars” worth of FTX customer money for investments and to cover loans, Ellison said. 

And the systems in place to allegedly steal that money — the allow-negative feature for Alameda and its $65 billion line of credit — was set up by Bankman-Fried, according to Ellison.

Bankman-Fried also told her to send falsified balance sheets to deceive investors, Ellison testified. 

When customers began to withdraw their funds from FTX in November, “pretty soon [the exchange] started running out of money,” Ellison told the court. 

Meanwhile, on a lighter note, a new sleeping juror has entered the chat — this time, they’re in the back row. At least our previous sleeping juror appears to have gotten some rest this weekend…

More on Wang before he was excused:

Everdell asked about Wang’s numerous meetings with the prosecutors — a figure Everdell put at 18 total since November 2022 — perhaps to suggest coaching by US prosecutors. 

Everdell tried to confirm the exact number. After reading out all the meetings, he asked yet again.

“Is it fair to say you met with the government 18 times?” Everdell asked Wang.

This drew a sharp rebuke from Judge Kaplan: “It was fair a long time ago.”

Notes from the courtroom: Resident crypto skeptic Ben McKenzie is in attendance.

12:10 pm ET: “Good, but not good enough”

Wang’s cross-examination continued.

During cross-examination, Everdell asked whether Wang was aware of the difference between liquidity and solvency.

“Well, now I am,” Wang replied, which drew laughter from reporters in the overflow room of the courthouse. 

To answer your burning question: Yes, the defense was able to ask questions about the $200 million loans. Midnight filings sometimes pay off, it seems. 

Wang received a loan from Alameda Research to buy a house.  

As part of the evidence, the defense showed the promissory note detailing the $35 million loan to Wang from Alameda. It was reportedly from April 30, 2022 with an interest rate of 2.21%. You know, things that normal businesses totally do.

Dan Friedberg, dubbed SBF’s “fixer” in previous FTX bankruptcy documentation, signed off on the promissory notes that memorialized the loans, according to Wang. 

During a 2019 conversation, Wang talked to Bankman-Fried about Alameda borrowing from FTX. SBF allegedly told his co-founder that as long as the balance sheet was positive, “it was fine.”

According to Wang, Alameda’s net asset value was positive after the bug — an $8 billion bug that Yedidia discussed in testimony last week — was fixed. Gary testified that he was “relieved” after the fact.

Alameda’s fiat liability to FTX was roughly $19 billion prior to Yedidia’s fix. 

The company paid off lenders around the time that the positive net asset value (NAV) occurred. Wang, however, was unclear about how much Alameda’s borrowing increased after it paid lenders off in follow-up questions posed by Everdell. 

Documents shown during cross-examination indicated Bankman-Fried’s mistrust of Alameda’s leadership, which included Ellison (who is set to take the stand today after Wang finishes testifying).

“The current Alameda leadership is good, but not good enough to be [trusted] with such a big operation,” SBF wrote.

Wang also backed up a point made by the defense during its opening remarks when he confirmed that SBF was upset that Alameda did not hedge its trades in 2022.

9:30 am ET: Gary’s back

We begin the day with FTX co-founder Gary Wang on the stand. He’s expected to face a cross-examination from SBF’s team. Let’s see if the three-day weekend refreshed their strategy because, ICYMI last week, Judge Lewis Kaplan made several comments about the repetitive nature of their questioning. 

Read more: SBF trial recap: ‘FTX was not fine, assets were not fine’

Ending the day on Friday, Kaplan told Christian Everdell, one of the defense lawyers that if they were just continuing to ask Wang circular “uncontroversial” questions then the court could break and let the team “start off afresh” Tuesday. 

(Hopefully, that sleepy juror had a relaxing weekend and 8+ hours of sleep for a busy week at trial this week.)

A slight change could be on the horizon this morning, which would really let the defense start “afresh” this morning. Late Monday night, SBF’s legal team asked to bring new evidence before the court. 

Read more: Alameda was spending more trading than FTX was making in revenue: Co-founder

Essentially, they want to ask Wang about lawyers who presented loans of around $200 million to $300 million to him from Alameda. 

A bold choice on the defense’s part to enter such a late filing when Kaplan, on top of his other comments, also made a comment about the nature of the “midnight” filings in this case. In all fairness though, both the defense and prosecution are guilty of a late-night filing…or two…or three.

After Wang’s cross-examination is done, the prosecution expects to call on former Alameda CEO — and former SBF flame — Caroline Ellison. 

Ellison pleaded guilty to federal criminal charges related to the collapse of Alameda and FTX last December. Both Wang and Ellison were released on bail.

Ellison’s name has come up a number of times since the trial started last week. Both the prosecution and the defense named her in their opening remarks. Though, the prosecution could have actually, you know, named her instead of referring to her as Bankman-Fried’s on-again-off-again girlfriend. 

Thane Rehn, one of the prosecutors, said that SBF used Ellison as a front. Expect her to be questioned on the “special access” that Alameda was given (thanks for breaking that down, Gary!) and give us more insight into SBF. 

Read more: Government hits jury with a victim and SBF’s old friend as first witnesses

Mark Cohen, a lawyer for Bankman-Fried, said that SBF was trying to step away from Alameda and put her in charge and he allegedly wanted her to hedge bets in case of a market decline, but she just didn’t listen.

Our reporter on the ground Friday, James Cirrone, said that Bankman-Fried seemed fidgety. Seeing Ellison on the stand might not help that. 

Oh, and in case you forgot, Ellison’s name was involved in Sam’s one-way ticket to jail. Bankman-Fried’s bond was revoked after he reportedly leaked Ellison’s diary to a New York Times reporter in July.

Hidden gem of the day: On Friday, Judge Kaplan — before everything was fully underway — seemed to kind of praise the lawyers. 

“Life is so much easier when lawyers treat each other with appropriate respect and, dare I say, affection,” he said.

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