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SBF Trial Day 5 – How Caroline Ellison’s testimony could become the smoking gun needed for a guilty verdict

Press Releases Crypto News CryptoSlate SBF Trial Day 5 – How Caroline Ellison’s testimony could become the smoking gun needed for a guilty verdict

The fifth day of the SBF trial included testimony from Alameda Research CEO Caroline Ellison, whose testimony became a pivotal point for the case as she confessed to committing fraud under SBF’s direction.

According to Ellison, SBF had instructed her to divert billions of dollars from FTX customer funds, which Alameda used for failed investments, to pay off its debt.

Her voice occasionally faltered as she discussed her late realization of Alameda’s financial distress and the subsequent schemes conceived by SBF to counter these losses. Among the shocking revelations, she shared SBF’s aspirations of becoming the U.S. President.

Ellison testifies on Alameda’s financial dealings

Ellison met SBF when they both worked at Jane Street — a renowned New York-based trading firm, and subsequently dated him for several years. SBF initially established Alameda Research and later inducted Ellison as its CEO.

In her testimony, Ellison recounted that SBF directed her to obtain several billion dollars from FTX customer funds as loans for Alameda to invest in various ventures. However, most of the investments failed and had to be written off.

Alameda then took more customer funds to the tune of $14 billion to clear its loans, which ultimately caused the exchange to collapse when customers began requesting withdrawals en masse.

Ellison also highlighted that she was oblivious to Alameda’s financial predicaments until joining the firm, after which SBF revealed strategies to mitigate these losses by mainly drawing funds from FTX.

Unbridled borrowing

Further details from Ellison’s testimony showcased that Alameda had been granted direct deposits ranging between $10-$20 billion from FTX in 2020 and 2022. From these, $2 billion was designated for repaying loans, investing, and converting capital to USDC.

Although Alameda ostensibly only required a credit line between $100 million and $200 million from FTX, there seemed to be no limit to their borrowing capacity. The timeline for returning

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Author: Assad Jafri

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