Sam Bankman-Fried's political dreams unveiled in courtroom drama.
Former FTX CEO Sam "SBF" Bankman-Fried once aimed for the Oval Office, says Caroline Ellison, his ex-girlfriend and former business associate.
This surprising revelation occurred during Ellison's court testimony against Bankman-Fried on October 10th as part of his ongoing criminal trial.
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Bankman-Fried and Ellison had leading roles at FTX and Alameda Research, respectively. While their personal relationship ended, their professional association continued until FTX's collapse in November 2022.
Ellison's testimony was part of a plea deal with prosecutors, where she admitted to fraudulent actions at Alameda under Bankman-Fried's supervision.
During testimony, she claimed that systems set up by Bankman-Fried led to Alameda Research funneling approximately $14 billion away from FTX. According to Ellison, between 2020 and 2022, from $10 to $20 billion of FTX user funds were redirected to Alameda, which were used for various financial activities such as repaying loans and making stablecoin conversions. Ellison further alleged that Alameda's line of credit was not disclosed to FTX investors or auditors.
Besides financial discrepancies, Ellison also testified about FTX buying back its own tokens from Binance, on instructions from Bankman-Fried to avoid any complications with the crypto exchange.
She mentioned that loans from Genesis served as a funding source for the firm in 2021. On her qualifications as CEO of Alameda, Ellison indicated she felt unqualified and stated:
Sam said I should do it. I checked everything with him. He was the person I reported to. He could fire me.
Moreover, Ellison provided a concerning insight into how Bankman-Fried approached risk, claiming he was willing to make bold bets if the expected value was positive.
He <SBF> said it was okay if <there was> positive EV, expected value. He said he was willing to take large coin flips. He talked about being willing to flip a coin and destroy the world, as long as a win would make it twice as good.
Before Ellison, the FTX co-founder and former CTO, Gary Wang, also testified, confessing to criminal activities along with her and Nishad Singh, the former FTX engineering director.
As of the latest updates, Bankman-Fried's legal team hasn't yet cross-examined Ellison. Their defense strategy seems to redirect some of the responsibility for FTX's downfall onto Ellison, alleging that she exercised her own discretion in using the crypto exchange's funds. Bankman-Fried has pleaded not guilty to all the charges leveled against him.
