This article is more than six months old

SBF ‘directed me’ to take $14bn from FTX customers — who is Caroline Ellison?

SBF ‘directed me’ to take $14bn from FTX customers — who is Caroline Ellison?
Caroline Ellison departs the United States Courthouse after testifying in the FTX's co-founder Sam Bankman-Fried's fraud case. Credit: Photo by Derek French/Shutterstock.
  • Ellison testified on Tuesday that Sam Bankman-Fried told her to take money from FTX customers to repay Alameda’s lenders.
  • Ellison, who was romantically involved in the past with Bankman-Fried, was the first member of his inner circle to strike a plea agreement with prosecutors.
  • The defence blamed Ellison in its opening statement for not putting hedges in effect at Alameda when asked to by Bankman-Fried.

Former Alameda Research CEO Caroline Ellison testified today that Sam Bankman-Fried had told her to take “around $14 billion” from FTX customers to repay Alameda lenders.

“He directed me to commit these crimes,” she said to the court.

Ellison has pleaded guilty to multiple fraud and conspiracy charges.

In her testimony, she estimated that between $10 billion and $20 billion in customer funds had ultimately been deposited into Alameda’s bank account. “If I knew this was happening in another exchange I would feel uncomfortable leaving my money there,” Ellison said.

Alameda would borrow from $100,000 to $10 million at a time from FTX customer money “for trading purposes,” she said.

Ellison testified that she asked Bankman-Fried whether Alameda’s line of credit would show up in an FTX audit. “Don’t worry,” she claimed he said. “The auditors aren’t going to look at that.”

Ellison also testified that it was her understanding that the $2 billion used in January 2022 to start FTX Ventures, a new crypto venture capital fund, came from Alameda, as did the $648 million used to purchase a stake in online broker Robinhood.

She also said that, despite being the CEO of Alameda, she consulted Bankman-Fried on any major decisions and would ultimately defer to him.

Join the community to get our latest stories and updates

Once the chief executive of one of the most successful hedge funds in crypto, Ellison is a star witness in the government’s trial against Bankman-Fried, who co-founded both crypto exchange FTX and Alameda Research. She was the first member of Bankman-Fried’s inner circle to strike a plea agreement with prosecutors.

While other FTX executives such as Gary Wang and Nishad Singh can provide insight into how the exchange was structured and engineered, Ellison is uniquely qualified to speak on trading matters — and the ways Alameda and FTX used customer funds.

Who is Caroline Ellison?

Ellison was born in 1994 in Boston and both her parents work as economists at the Massachusetts Institute of Technology. She graduated from Stanford in 2016 with a bachelor’s degree in mathematics.

Managing Alameda

Ellison first met Bankman-Fried while she was an intern at Jane Street, the quantitative trading firm where Bankman-Fried worked. “I was kind of, like, terrified of him,” she told Michael Lewis in his new book profiling Bankman-Fried entitled “Going Infinite: The Rise and Fall of a New Tycoon.”

But the pair bonded over their shared interest in effective altruism, a philosophy whose adherents seek to maximize the good they do in the world, including by potentially earning as much money as they can and giving it all away. In the fall of 2017 Bankman-Fried offered her a job at Alameda — the crypto hedge fund he’d co-founded that September.

By 2021, Ellison had become the company’s co-CEO, alongside crypto quant trader Sam Trabucco. “When he’d named her to the job, Sam imagined Caroline managing the people, while Sam Trabucco managed the trading risks,” writes Lewis. But Trabucco lost interest, so Ellison ended up managing the entire company and reporting straight to Bankman-Fried.

That the two were involved romantically complicated matters. Ellison wanted him to publicly acknowledge their relationship, while Bankman-Fried wanted to keep it a secret.

Ellison’s embarrassment and dissatisfaction seeped into her work life. She “sensed” that Bankman-Fried “disapproved of her job performance — ­and she shared his opinion,” according to Lewis.

“It feels like I’m doing a much worse job managing Alameda than you would if you were working on it full-­time,” she wrote to Bankman-Fried, “and I’m going to [screw] up important things if you don’t step in sometimes.”

Court documents indicate that Ellison only received $6 million in compensation for her work at Alameda Research. Trabucco was given $25 million. Other FTX executives pocketed anywhere between $87 million and $2.2 billion.

In April 2022, Ellison kicked Bankman-Fried out of their shared room in the $30 million penthouse in which they lived with Wang, Singh, Bankman-Fried’s college friend Adam Yedidia, and their respective partners.

When, in mid-June, Ellison discovered an anomaly in Alameda’s FTX account, she shared her concerns with Singh. In September, she pulled Singh aside again to tell him she was growing worried about Alameda’s market exposure. He then relayed the message to Bankman-Fried.

FTX collapsed two months later.

Her reaction to FTX’s implosion

Ellison was “almost upbeat” as she watched Bankman-Fried’s financial empire crumble last November, writes Lewis.

“Feel weirdly good to get it over with,” Ellison told Bankman-Fried in a text message. “I’ve been dreading this for a long time so [it] feels like a big weight off my shoulders.”

She’d been dissatisfied with Bankman-Fried as a romantic partner, and had mulled a departure from Alameda on multiple occasions. But he had convinced her to stay.

“Running Alameda doesn’t feel like something I’m that comparatively advantaged at or well suited to do,” she wrote to him in April 2022. “But yeah, I think it’s plausible that running Alameda is super high [expected value] and way higher than my next best option.”

Putting the blame on Ellison

In the months following Bankman-Fried’s arrest, Ellison has never been far from the spotlight. She has found herself the subject of an avalanche of sexist memes online and has had her personal diary flaunted in the New York Times this summer.

The release of the diary — which was given to a reporter by Bankman-Fried — resulted in the end of the FTX co-founder’s home arrest and his being sent to jail. Judge Kaplan said it may have amounted to witness tampering, a federal crime.

Opening statements made by Bankman-Fried’s attorney suggest that one of the defence’s strategies is to blame FTX’s collapse on Ellison.

“As the majority owner of Alameda, [Bankman-Fried] spoke to Ms Ellison, the CEO, and he urged her to put on a hedge, something that would protect against such a downturn. She didn’t do so at the time, and this also becomes an issue later on, when the storm hit,” Bankman-Fried’s lawyer said.

UPDATE: Added additional testimony from Ellison.

Tom Carreras is DL News’ Markets Correspondent. He is based in Costa Rica. For any tips regarding the SBF trial, you can reach him at