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Ellison’s ‘devastating’ testimony will be hard for SBF’s team to overcome, lawyers say

Ellison’s ‘devastating’ testimony will be hard for SBF’s team to overcome, lawyers say
Caroline Ellison's remarks have been the most-anticipated of the trial so far. Credit: Rita Fortunato/DL News
  • Prosecutors concluded their direct examination of Caroline Ellison, Sam Bankman-Fried’s former business partner and girlfriend, on Wednesday.
  • Her testimony was "the best testimony you want [as a prosecutor]," according to a former federal prosecutor.
  • Bankman-Fried’s attorneys began their cross-examination at the end of Wednesday’s session and will continue it on Thursday.

The week that FTX collapsed, Caroline Ellison told her boss and former boyfriend Sam Bankman-Fried in a text message that she felt good.

Better than she had in months, in fact.

“I didn’t have to lie anymore,” she said, sobbing, before the judge and jury who will decide Bankman-Fried’s fate in the next couple of weeks.

It may have been the emotional peak of her hours-long testimony, but it didn’t end there. Ellison detailed their history as paramours, Bankman-Fried’s issues with “rules like ‘don’t lie and ‘don’t steal,’” Alameda’s years-long use of FTX customer deposits and how she, at Bankman-Fried’s request, falsified company documents in order to assuage nervous lenders.

Ellison’s testimony was “sub-optimal for Sam Bankman-Fried,” Daniel Richman, a professor at Columbia Law School and former prosecutor in the Southern District of New York, said, laughing at his own understatement.

Another former prosecutor who’s now in private practice had stronger words.

“Her testimony is devastating,” the former prosecutor, who has held senior positions within the US Attorney’s Office in the Southern District of New York and asked not to be identified, told DL News.

“You have an eye witness to the crime, someone who participated in the crime, who’s committing the crime with the guy and who can give a blow-by-blow account of what happened,” the former prosecutor continued. “It’s the best testimony you want [as a prosecutor].”

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Ellison, the former CEO of FTX sister company Alameda Research, pleaded guilty to fraud and agreed to cooperate with prosecutors shortly after FTX’s collapse. With her knowledge of both companies and status as Bankman-Fried’s one-time girlfriend, her testimony was among the most anticipated moments of the trial.

“This is sort of a standard conundrum for a defendant in a case where there are multiple cooperators, who are closely situated to him,” Richman told DL News. “It’s one [defendants] have tools to address. Whether they’ll be successful in addressing it or not varies.”

Defence tactics

The defence will likely argue Ellison is throwing Bankman-Friend under the bus to dodge a lifetime in jail, the lawyers said. While prosecutors cannot guarantee a lenient sentence, judges understand that the government loses a powerful tool when cooperating witnesses are sentenced to decades in prison.

“For sure, she’s getting a benefit [for her cooperation] and she’s going to have to admit to that,” the former prosecutor said. “They’re going to try to paint her as somebody who’s got an incentive to lie.”

But the ex-prosecutor said the specifics of Ellison and Bankman-Fried’s romantic relationship would help the prosecution’s case.

“[The prosecutors] elicited these salacious details, about sleeping together on-and-off,” she said. “It really bolstered her credibility, explained to the jury that just because she’s super educated and super successful, it doesn’t mean that she’s not going to be susceptible to pressure from a boyfriend.”

Bankman-Fried’s attorneys began their cross-examination Wednesday but were quickly cut off as the end of the day approached.

In addition to suggesting Ellison has an incentive to lie, they will likely attempt to paint her as an intelligent, accomplished, strong woman — not someone who would bow so easily to pressure from an ex-lover, according to the former prosecutor.

But the numbers aren’t on Bankman-Fried’s side: only a fraction of defendants in the Southern District of New York go to trial, according to the former prosecutor. Fewer still manage to secure a hung jury or acquittal.

“The people who go to trial, like, generally are a little bit crazy,” she said.

Aleks Gilbert is DL News’ New York-based DeFi Correspondent. Reach out to him with tips at