Original author: David Yaffe-Bellany, Matthew Goldstein
Original compilation: Luffy, Foresight News
A few months before the trial of the SBF case (October 2 this year), SBF leaked some of the private documents of Caroline Ellison (an important witness in the case, ex-girlfriend of SBF, and former CEO of Alameda) to the New York Times. U.S. prosecutors claimed that SBFs move was to discredit witnesses and restrict their testimony. The New York Times published an article about Caroline Ellisons private documents, focusing on Caroline Ellisons relationship with SBF and her inner conflicts while working at Alameda. Foresight News compiled and compiled this article as follows:
Three months before last year’s cryptocurrency market crash, Caroline Ellison, the 27-year-old CEO of crypto hedge fund Alameda Research, was racked by self-doubt.
“I have been feeling extremely unhappy and overwhelmed with my job,” Ellison wrote in a February 2022 Google document. “At the end of the day, I couldn’t wait to go home and turn off my phone,” she added. , have a glass of wine and get away from it all.”
Ellison has a lot on his mind. She wrote in another Google document that she didnt think she was well suited to manage Alameda, especially as a decision-maker. She also went through a bad relationship with Sam Bankman-Fried (SBF), the then-billionaire entrepreneur who founded Alameda and later FTX, one of the world’s largest cryptocurrency exchanges. They dated on and off but eventually broke up, mostly because Ellison was worried about making things weird at work or having a negative impact.
It feels like there is no end in sight, she wrote in the February 2022 filing.
Ellison will now be a witness in Sam Bankman-Frieds criminal trial scheduled for October 2.
SBF, 31, is accused of misusing billions of dollars of clients assets and faces eight counts of fraud and election law violations. His downfall led to the bankruptcy of FTX and Alameda, and Ellison went from a powerful but relatively secretive figure to the subject of headlines. She pleaded guilty to fraud charges in December and agreed to cooperate with federal prosecutors investigating her ex-boyfriend.
SBFs case is about to be finalized in a Manhattan court. Two other FTX executives, Nishad Singh and Gary Wang, also pleaded guilty and agreed to cooperate. In June, after weeks of legal wrangling over the SBF charges, the judge in the case set a fast timetable for the preparations for the trial, asking prosecutors to provide a witness list and other final material. Prosecutors are expected to begin contacting additional witnesses in August, two people familiar with the matter said.
As SBFs ex-girlfriend and one of his earliest partners, Ellison has unique insights into the FTX founder. Ellison recorded many of her thoughts in writing, observing her personal and professional life in handwritten diaries and Google documents, according to The New York Times and four people familiar with the matter who have reviewed her documents. The documents were widely circulated among lawyers involved in the case.
These previously unreported documents shed new light on Ellisons mental state and changes during his final months at FTX. Ellison, 28, is a prolific writer who has been widely criticized for her Tumblr posts about Harry Potter and Jane Austen. But the Google documents are more private, some of them written directly to SBF, illustrating the complexity of their relationship and her ambivalence toward Alameda.
In a Google document to SBF in April 2022, Ellison wrote that an earlier breakup with him significantly reduced my excitement for Alameda. Life at a hedge fund, she adds, feels so connected to you that its painful.
Representatives for Ellisons legal team and lawyers for SBF declined to comment. A spokesman for the U.S. Attorneys Office for the Southern District of New York in Manhattan, which prosecuted the case, also declined to comment.
Ellison graduated from Stanford University and met SBF at Jane Street, a quantitative trading company where she worked after graduation. Their shared commitment to effective altruism has attracted a following in the technology and financial industries.
After SBF left Jane Street to found Alameda in 2017, he recruited Ellison as a trader. In 2021, he promoted her to co-CEO, alongside another early employee, Sam Trabucco.
At the same time, SBF and Ellison also began a rocky relationship, breaking up and making up multiple times. Sometimes, Ellison worries that SBF thinks shes not good enough. She wrote in a February 2022 Google document that when he was around, she had an instinct to shrink back, become quieter, and defer to others.
After a breakup, Ellison cut ties with SBF. I feel so heartbroken, she wrote in a Google document from April 2022. Not contacting you is the only way I can regain my sense of power.
Alameda and FTX founder Sam Bankman-Fried in their Hong Kong offices in 2021
By last year, SBF had become one of the most famous cryptocurrency entrepreneurs in the world, with his photo regularly appearing on billboards and magazine covers. His fame seemed to make Ellisons life at FTX and Alameda more difficult.
She wrote in the April 2022 filing that staying at Alameda means having to be around you all the time and hearing people talk about how great you are.
Ellisons compensation is far less generous than that of other executives at FTX and Alameda, though its unclear whether she realizes this. According to court documents, the exchange’s founders and other key employees received $3.2 billion in payments and loans. Among them, Ellison received US$6 million, while FTX engineering director Mr. Singh received US$587 million, and one of the founders, Mr. Wang, received US$246 million. SBF received $2.2 billion.
In May 2022, the cryptocurrency market collapsed and several well-known companies fell into bankruptcy. The regulator alleges that SBF, Mr. Wang, Mr. Singh and Ellison used billions of client funds deposited with FTX to plug holes in Alameda’s accounts during the crisis.
Even before that, Ellison doubted his abilities. In the April 2022 document, she listed the difficulties she encountered, including leadership and decision-making.
Running Alameda doesnt feel like something Im relatively advantaged or suited to do, she wrote.
By last fall, the SBF had lost confidence in Alameda. He considered shutting down the firm and invested more than $400 million in another trading firm, Modulo Capital, led by another former Jane Street trader whom SBF had met, according to court records.
Two people who have seen Ellisons documents said that in some of her writings she expressed jealousy and resentment toward Modulo, as well as a sense of being left out.
SBFs business empire collapsed in November when a run on deposits exposed an $8 billion deficit.
I just feel more and more depressed about this day coming, Ellison wrote in a letter to him that month, a message excerpted in court records. Now that its really happening, it feels good to be done with it.
In December, SBF was arrested in the Bahamas, where FTX is headquartered, and taken to a prison not far from his luxury apartment. Previously, SBF he shared the luxury penthouse with Ellison and eight other roommates. SBF is currently under house arrest at his parents home in Palo Alto, California.
People who know Ellison say they are shocked by how candid she is about admitting her shortcomings. In December, she told the court she was deeply sorry for her fraud. I know its wrong, she said.
Ellison is expected to repeat the claim at the SBF trial, which is expected to last four to five weeks. Two people familiar with the matter said much of the trial will revolve around messages sent by SBF and three collaborators on the messaging app Signal.
Attorneys familiar with the case said that as a woman in the male-dominated cryptocurrency industry, Ellison may have an easier time gaining juror sympathy than other cooperators. In an interview last year, SBF placed some of the blame for FTXs collapse on Alameda, saying he had little involvement in Alamedas day-to-day management.
Former federal prosecutor Moira Penza said the power differential between Ellison and the SBF could give her a convincing voice. “But in my opinion, that’s not necessarily a good thing for the defendant,” Penza said, “especially when it comes to (taking advantage of) another person who had a close relationship (to exonerate).
