Caroline Ellison desired to step down but feared a bank run on FTX

Caroline Ellison wasn’t doing a good job leading Alameda Research in 2022, and she did not hide it. Pieces of her personal notes shared as evidence by prosecutors on Sam Bankman-Fried’s trial revealed details about the trading firm’s struggles and its CEO’s desire to resign weeks and months before the collapse of FTX.

Ellison spent over ten hours testifying during Bankman-Fried’s trial this week, notably entering through the front doors of the federal court in Manhattan, joined by her attorneys. According to Ellison, she had not seen Bankman-Fried since the crypto empire failed in November last year. But their communication eroded even months before.

In April 2022, their romantic relationship came to an end, and Caroline started avoiding meetings with Bankman-Fried, even though they still lived in the same luxurious apartment in the Bahamas. Alameda’s growing liabilities with FTX and the breakup made her consider leaving Alameda.

“I feel link neither Trabucco nor I have been doing a great job of pushing on stuff,” she wrote in the document to Bankman-Fried, shared as evidence during her cross-examination by his defense counsel.

One more Caroline Ellison courtroom sketch.

This one featuring SBF himself! https://t.co/q3O6xqxEhl pic.twitter.com/cQJbj5V1H7

— Ariel Givner, Esq. (@GivnerAriel) October 11, 2023

Bankman-Fried asked her to stay, saying that her departure could create rumors about Alameda’s financial health, thus harming FTX credibility. Ellison remained as CEO.

Ellison joined Alameda as a trader in 2018. By 2020, she was handling most of the company’s operations, while Bankman-Fried was focused on his newly launched crypto exchange FTX. In August 2021, she became co-CEO alongside Sam Trabucco, who stepped down a few months later, leaving her in charge of the company. In August 2022, Trabucco officially resigned as co-CEO.

Ellison was against creating FTX, she revealed. “I didn’t think of myself as ambitious before I started at Alameda, but I believe I became more ambitious” under Bankman-Fried’s incentive, she said.

As CEO, Elisson was in charge of handling Alameda’s crypto lenders. In mid-2022, after the Terra ecosystem failed, the company’s open-ter

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Author: Ana Paula Pereira

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