Caroline Ellison wanted to resign but feared banking on FTX.

Caroline Ellison In 2022, Alameda isn't doing a good job of directing research, and she doesn't hide it. Her personal notes, shared as evidence by prosecutors at Sam Bankman-Fried's trial, detailed the company's struggles and the CEO's desire to step down in the weeks and months before FTX collapsed.

Ellison spent more than ten hours testifying during the Bankman-Fried trial this week, mostly walking through the front doors of the federal courthouse in Manhattan, accompanied by her attorneys. According to Ellison, she hasn't seen Bankman-Fried since her crypto empire collapsed in November of last year. But their relationship broke up months ago.

In the year In April 2022, their romance ended, and Caroline began avoiding meetings with Bankman-Fried even though they shared the same luxury apartment in the Bahamas. Alameda's growing debt with FTX and the breakup caused Alameda to consider leaving.

“I feel that neither Trabucom nor I are doing a great job of pushing things,” she wrote to Bankman-Fried in the document, which she shared as evidence under questioning by defense counsel.

One more Carolyn Ellison courtroom sketch.

This SBF shows itself! pic.twitter.com/cQJbj5V1H7

– Ariel Givner, Is. (@GivnerAriel) October 11, 2023

Bankman-Fried asked her to stay on, saying her departure could create rumors about Alameda's financial health, thereby damaging FTX's credibility. Ellison remains CEO.

In the year In the year In August 2021, she became co-CEO alongside Sam Trabuco, who resigned a few months later, leaving him in charge of the company. In August 2022, Trabuco officially stepped down as CEO.

Ellison explains that FTX is opposed to creation. “Before I started Alameda, I didn't think of myself as ambitious, but I believe I am more ambitious” with Bankman-Fried's encouragement, she said.

As CEO, Ellison was responsible for handling Alameda's crypto lenders. In the year By mid-2022, after the Terra Ecosystem failed, the company's open-ended debt reached $1.3 billion. The market downturn drained the liquidity of crypto assets, prompting Alameda's lenders to demand repayment of their loans.

According to Ellison, Bankman-Fried instructed her to continue paying creditors through Alameda's line of credit with FTX. In other words, Alameda was using the assets of FTX clients to repay crypto creditors. At that time, the credit line with the exchange was $13 billion.

When creditors demanded payment of the loans and Alameda's balance, Bankman-Fried suggested that Ellison use an “alternative means” of providing the company's finances. In the coming months, Ellison would create several more versions of the ledger to deceive creditors.

In early November, an alternate version of Alameda Balance was released. At the time, Ellison was on vacation in Japan, but she had to go to the FTX Hong Kong office to deal with the company's problems.

Although the financial statements did not show the reality of the company, after a few days it was enough to spread rumors and start banking on FTX, which exposed the difference of 8 billion dollars between the companies.

Ellison will soon face sentencing on seven counts of racketeering and conspiracy to commit fraud with the Department of Justice since December.

Caroline Ellison In 2022, Alameda isn't doing a good job of directing research, and she doesn't hide it. Her personal notes, shared as evidence by prosecutors at Sam Bankman-Fried's trial, detailed the company's struggles and the CEO's desire to step down in the weeks and months before FTX collapsed.

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