SBF trial day 6: ex-girlfriend Caroline Ellison’s explosive testimony collection

4 months ago
This article is approximately 970 words,and reading the entire article takes about 2 minutes
Misappropriated FTX customer funds, prepared 7 false financial statements, was frightened by CZ’s tweets about selling FTT, and created SBF’s character...

Original court transcript from XInner City Press, compiled by Odaily jk.

SBF trial day 6: ex-girlfriend Caroline Ellison’s explosive testimony collection

Recently, many truths about the FTX exchange case have surfaced in court, revealing the unknown side of the wild crypto market. On the sixth day of the SBF trial, former Alameda executive Caroline Ellison gave the court a detailed description of the companys internal decisions and operations. At present, this part of the questioning testimony focuses on several major focuses:Alameda’s misappropriation of FTX client funds, Alameda’s false financial statements, CZ’s response to Twitter and SBF’s personal relationship with Caroline Ellison, etc.. Odaily has compiled first-hand records of on-site court questioning, as follows:

(Note: In the trial transcript, the defendant is represented by Sam Bankman-Fried.)

Instructed to misappropriate FTX client funds

AUSA (Assistant United States Attorney): Please read this. What is USD return?

Ellison (Caroline Ellison): This is the repayment of our USD loan to this cryptocurrency address.

AUSA: What is an OT loan?

Ellison: OT loans are open term loans. Genesis hopes to recoup $400 million.I was very anxious. We had to take money from FTX.

AUSA: Where will the money Alameda takes out of FTX come from?

Ellison: Client.

AUSA: So, what was your mental state at that time?

Cohen, SBF’s lawyer: Objection!

Judge Kaplan: Opposed to dismissal.

Ellison: Im worried about customers withdrawing money from FTX, and this information (Alameda withdrawals) becoming known to the outside world, may hurt people.

AUSA: Where will the money Alameda takes out of FTX come from?

Ellison: Client.

AUSA: Did you calculate Alamedas balance - did you share that information with the defendant?

Ellison: Yeah, I updated the balance sheet every time he asked.Hes my boss, the owner of Alameda.

AUSA: What did he tell you to do?

Ellison: He instructed me to repay the loan.

AUSA: Do you understand what he asked you to do?

Ellison: Using Alamedas credit line with FTX - that is, using client funds. He knew this was the only way he could pay it back. Sam let us-

AUSA: Who are we?

Ellison: Me, Gary and Nishad.

AUSA: What did the defendant tell you to do?

Ellison: Continue to repay Alamedas loan.

AUSA: How did you do it?

Ellison: Withdrawal from FTX client funds.

Created 7 false financial statements and sent them to creditors

AUSA: Who is Matt Ballensweig?

Ellison: Hes the head of lending at Genesis. He requested a more updated balance sheet.

AUSA: Where were you living at the time?

Ellison: In the Bahamas.

AUSA: You are in the apartment(Odaily note: SBF’s famous penthouse)Have you ever had a meeting there?

Ellison: Yes.

AUSA: What did you do?

Ellison: Sam said dont send the balance sheet to Genesis. We borrowed $10 billion from FTX and had $5 billion in loans to our own executives and affiliated entities. We believe Genesis may share this information (with others).

AUSA: What did the defendant tell you to do?

Ellison: He told me to think of other ways to present this information. He wanted me to hide something on our balance sheet. So I prepared 7 different balance sheets. Im not going to lie, but I presented the options to Sam and let him decide.

AUSA: What is GX 44 (Exhibit Code)?

Ellison: This is a spreadsheet of seven alternatives, all false statements, dated June 19, 2022.

AUSA: What would happen if all FTX customers tried to withdraw?

Ellison: We have no money.

AUSA: Which of the 7 options did Sam choose?

Ellison: Option 7 chose not to disclose $9.9 billion owed to FTX customers.

AUSA: What is the overall impact of these changes?

Ellison: Making Alameda look safer than it actually is. Sam requested that option 7 be sent to Genesis. I did.

CZ’s Twitter at the time and Caroline’s response

Ellison: This tweet attributed the delay to anti-spam and node issues. But really we just don’t have the money.

AUSA: Is this Binance’s CZ’s tweet?

Ellison: Yes. We have decided to liquidate all FTTs on our books, he tweeted.I was very nervous

AUSA: Did you discuss this tweet with the defendant?

Ellison: Yes. We decided I should respond to a tweet. We have a Signal chat group.

AUSA: You said you were willing to buy all of Binance’s FTT at $22 per share.

Ellison: I wanted to see if he was bluffing - his intention was to hurt FTX.

AUSA: You wrote, Im about to tweet. Have you posted it?

Ellison: Yes.

AUSA: Let’s talk about November 7th. Are you still chatting with the defendant?

Ellison: Yes. This is the group chat for November 7th. We are left with only 10 to 200 million in liquidity. I said, we could probably squeeze out more.

AUSA: Who wrote, I cant handle this very well?

Ellison: Its me.

AUSA: What did Sam write?

Ellison: Wow, congratulations? Because this is so exciting?

SBFs Lawyer: Is there a date on this?

AUSA: This is an undated screenshot.

Ellison: Its November 7th.I have a lot of mood swings. But I felt... relieved. I dont need to lie anymore(voice choked).

Ellison: I feel terrible... (sobs)

AUSA: Why did you share this with the defendant?

Ellison: I don’t know who else to share this with. Before this, I had not shared this emotion with the defendant.

AUSA: We can write this down.

SBF’s image management and personality creation

Ellison: I try to keep a low profile. But when Sam Trabucco stepped down, I took to Twitter. Sam said there had to be someone in Alameda.

AUSA: What does Sam say about Twitter?

Ellison: He says acquiring customers and investors is very important.

AUSA: How would you describe him personally?

Ellison:He doesnt comb his hair.He said it got him a bonus at Jane Street and was important to FTX.

AUSA: What about the car?

SBFs lawyer: Objection, irrelevant to this case.

Judge Kaplan: Opposed to dismissal.

Ellison:Sam said it would be best to drive a Toyota Corolla for the sake of his image. So I drove a (similar grade) Honda.

The trial in the SBF case will continue and Odaily will continue to follow the reports for you.

Original article, author:jk。Reprint/Content Collaboration/For Reporting, Please Contact;Illegal reprinting must be punished by law.

ODAILY reminds readers to establish correct monetary and investment concepts, rationally view blockchain, and effectively improve risk awareness; We can actively report and report any illegal or criminal clues discovered to relevant departments.

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