Caroline Ellison Says She and Sam Bankman-Fried Lied for Years

Caroline Ellison, a top adviser to the cryptocurrency mogul Sam Bankman-Fried, testified on Wednesday that she had lied over and over at his request, misleading the public about his businesses and circulating "dishonest" financial documents to crypto lenders.

By the time Mr. Bankman-Fried's two companies — FTX, a digital currency exchange, and Alameda Research, a hedge fund — collapsed in November, the lies had become too much to bear, Ms. Ellison said, and the implosions were almost cathartic.

"Overall it was the worst week of my life," said Ms. Ellison, 28, fighting back tears as she recounted the frantic week when the companies failed. "I felt this sense of relief that I didn't have to lie anymore, and that I could start taking responsibility even though I felt indescribably bad."

Ms. Ellison's testimony, in her second day on the witness stand, was the most emotional moment so far of Mr. Bankman-Fried's fraud trial. She was widely considered the government's star witness, partly because she dated Mr. Bankman-Fried on and off for years, giving her unique access to the FTX founder as his crypto empire grew. His trial in federal court in Manhattan has become a referendum on high-risk practices across the crypto industry that led to billions of dollars in losses last year.

In the courtroom, Mr. Bankman-Fried, 31, did not visibly react to Ms. Ellison's testimony. During a break in proceedings, he glanced at a group of reporters sitting in the gallery and raised his eyebrows.

Mr. Bankman-Fried has been charged with orchestrating a scheme to turn FTX into his personal piggy bank. The authorities contend that he stole as much as $10 billion from FTX customers to finance venture capital investments, buy luxury real estate, make campaign donations and pay off lenders to Alameda.

Ms. Ellison, who was Alameda’s chief executive, has said she served as one of Mr. Bankman-Fried’s main accomplices by channeling FTX customer funds into Alameda's coffers. In December, she pleaded guilty to fraud and conspiracy and agreed to cooperate with prosecutors in return for leniency. Gary Wang and Nishad Singh, two top FTX executives, also pleaded guilty and are cooperating with the government.

(Source: The New York Times)