Caroline Ellison, former girlfriend of disgraced FTX CEO Sam Bankman-Fried and former chief executive of Alameda Research, said she conspired with Bankman-Fried to conceal the fact that the hedge fund could borrow unlimited sums from FTX.
BREAKING: Alameda’s Caroline Ellison just admits in court that she and others stole billions of dollars from FTX customers.
— Layah Heilpern (@LayahHeilpern) December 23, 2022
On Monday, Ellison pleaded guilty to federal fraud charges in connection with her role as the CEO of the Alameda Research hedge fund.
In a transcript made public on Friday, Ellison admitted that she “understood that many FTX customers invested in crypto derivatives and that most FTX customers did not expect that FTX would lend out their digital asset holdings and fiat currency deposits to Alameda in this fashion.”
According to a hearing before U.S. District Judge Ronnie Abrams in Manhattan federal court, Ellison confessed that they had “prepared certain quarterly balance sheets that concealed the extent of Alameda’s borrowing and the billions of dollars in loans that Alameda had made to FTX executives and to related parties.”`
“I am truly sorry for what I did,” Caroline Ellison said. “I knew that it was wrong.”
Ellison faces multiple charges, including wire fraud, money laundering, and securities fraud. She could receive up to 110 years in prison.
Ellison was released on a $250,000 bond after pleading guilty.
According to the agreement, prosecutors will not recommend any specific sentence in return for her testimony but the agreement also says that they would submit a letter asking for a more lenient sentence if Ellison provides “substantial assistance.”
Former Brooklyn federal prosecutor Moira Penza said it was too early to tell how much time the 28-year-old math genius will receive but that “cooperating early was the best thing she could have done to seriously reduce her possible sentence.”
Penza said that it’s “not unheard of for a testifying cooperator, even ones facing as long a sentence as Ms. Ellison, to receive probation rather than any prison term.”
So, while SBF was yapping away to everyone with microphone and throwing his ex girlfriend under the bus she was singing like a canary to the authorities.
Caroline Ellison and Gary Wang cooperated and cut deals. The plot thickens and I'm on it.
Making Money with Charles Payne
— Charles V Payne (@cvpayne) December 22, 2022
Ellison allegedly met Bankman-Fried when she was working at the trading firm Jane Street. The two are said to have bonded over their interest in effective altruism.
Ellison’s virtual presence has been deleted over the last few weeks. Her LinkedIn, online photos and contact information have been taken down, making it difficult for journalists and investigators to find information about her.
Ellison and her colleague, Sam Trabucco, were featured in Forbes’ 30 Under 30 in 2022.