NEW YORK — Sam Bankman-Fried ‘s former top executive, testifying in Manhattan federal court Wednesday, blamed the FTX founder for corrupting her values so she could lie and steal and got emotional when describing the cryptocurrency empire’s last days, saying the collapse of his companies resulted in a “relief that I didn’t have to lie anymore.”
Caroline Ellison, who ultimately was made chief government of Bankman-Fried’s cryptocurrency hedge fund, Alameda Research, blamed the person she was entwined with romantically for a number of years since 2018 for creating justifications in order that she might do issues that she now admits had been incorrect and unlawful.
Testifying for a second day, she recalled that Bankman-Fried stated he wished to do the best good for the most individuals and that guidelines like “don’t lie” or “don’t steal” should typically be put aside.
Assistant U.S. Attorney Danielle Sassoon requested Ellison how she was affected by Bankman-Fried’s philosophy.
“I think it made me more willing to do things like lie and steal over time,” she stated.
After a number of hours on the witness stand, Ellison obtained choked up as she described the ultimate days of FTX and Alameda, saying that the early November interval earlier than the companies filed for chapter “was overall the worst week of my life.”
Still, she stated she felt unhealthy for “all the people harmed” when there wasn’t sufficient cash left for all of FTX’s clients and Alameda’s lenders.
When the tip arrived, Ellison stated it left her with a “sense of relief that I didn’t have to lie anymore.”
Earlier in her testimony, Ellison revealed that she doctored steadiness sheets to attempt to conceal that Alameda was borrowing about $10 billion from FTX clients in June 2022, when the cryptocurrency market was falling dramatically and a few lenders had been demanding that Alameda return their investments in full.
She stated she as soon as created seven totally different steadiness sheets after Bankman-Fried directed her to seek out methods to hide issues that may look unhealthy to Alameda’s lenders.
“I didn’t really want to be dishonest, but I also didn’t want them to know the truth,” Ellison stated.
She stated just a few years earlier, she would by no means have believed that she’d in the future be sending false steadiness sheets to lenders or misallocating buyer cash, “but I think it became something I became more comfortable with as I was working there.”
Ellison stated she was in a “constant state of dread” at that time, fearful {that a} rush of buyer withdrawals from FTX couldn’t be met or that what that they had carried out would change into public.
“In June 2022, we were in the bad situation and I was concerned that if anybody found out, it would all come crashing down,” she stated.
The crash got here final November, when FTX couldn’t fulfill a rush of buyer withdrawals, forcing it into chapter 11 and prompting investigations by prosecutors and regulators.
“I was terrified,” she stated. “This was what I had been worried about the past several months and it was finally happening.”
She was anticipated to be cross-examined on Thursday.
Bankman-Fried, 31, has pleaded not responsible to fraud costs. His legal professionals say he was not criminally responsible for what occurred to his companies.
Source: www.bostonherald.com”