Former Alameda Research CEO and the ex-girlfriend of SBF Caroline Ellison testified Wednesday that Sam Bankman-Fried conspired to sell Bitcoin to artificially suppress prices below $20,000.
Appearing in FTX’s criminal fraud trial on Wednesday, Ellison said SBF directed Alameda to dump BTC acquired from FTX customer funds to stabilize prices.
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Caroline Ellison admitted to improperly using customer deposits
Ellison admitted to improperly using FTX customer deposits to cover Alameda debts, also at SBF’s behest, totaling around $10 billion. When customers rushed to withdraw funds in November 2022, neither FTX nor Alameda had sufficient reserves, precipitating FTX’s collapse.
Ellison further testified that SBF ordered Alameda to aggressively buy and sell the native FTX token, FTT, to defend its peg when prices dropped.
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Her testimony directly implicates SBF in the illicit use of client funds and markets. Ellison contends she committed crimes alongside the founder by misleading lenders.
The revelations provide the clearest picture yet of the mechanisms behind Alameda and FTX’s co-mingled operations and reckless business practices.
Ellison’s emerging role as a star witness represents a dramatic turn after her close ties to SBF as both partner and CEO. Her statements have dealt a major blow to his defense thus far. SBF faces up to 115 years in prison if convicted on all charges.