Key Moments in the Cross-Examination of Caroline Ellison in the Sam Bankman-Fried Trial

The trial of FTX founder Sam Bankman-Fried, embroiled in a high-profile fraud case, continued with the cross-examination of Caroline Ellison, the government’s star witness. This pivotal testimony sheds light on the intricate web of relationships and financial dealings at the heart of the case.

Ellison, formerly the CEO of Bankman-Fried’s hedge fund, Alameda Research, had a complex relationship with the defendant, and this dynamic played a central role in the trial. She has been cooperating with the government as part of her plea deal, which includes charges related to wire fraud, conspiracy to commit wire fraud, commodities fraud, securities fraud, and money laundering.

During the cross-examination, conducted by Bankman-Fried’s lawyer, Mark Cohen, some of the most compelling moments occurred. Here are key takeaways from this part of the trial:

1. Challenging Testimony: Ellison faced aggressive questioning from Cohen, who frequently spoke over her during her testimony. Despite the challenging atmosphere, Ellison maintained her composure throughout the cross-examination.

2. Sam Trabucco’s Role: A significant part of the cross-examination revolved around Sam Trabucco, who co-CEO of Alameda Research alongside Ellison. Their roles became increasingly prominent as early as 2020, even before they officially took over. Ellison revealed that Bankman-Fried distanced himself from the daily operations of Alameda by 2021, leaving more responsibilities to her and Trabucco.

3. Financial Manipulation: Ellison admitted to using FTX customer funds to cover Alameda’s loans, allegedly at Bankman-Fried’s suggestion. This revelation emphasizes the intertwining of financial operations between the two entities.

4. Personal Relationship Impact: Ellison’s romantic relationship with Bankman-Fried was discussed, with her revealing that their breakup in the spring of 2022 had a noticeable effect on their communication. They primarily communicated via the Signal app, even though they shared the same apartment, and tried to minimize personal interaction outside of work.

5. FBI Raid and Cooperation: Following FTX’s declaration of bankruptcy, FBI agents searched Ellison’s home, along with her boyfriend, who had ties to Alameda and FTX. This incident prompted Ellison to cooperate extensively with prosecutors.

6. Bankman-Fried’s Behavior: Bankman-Fried’s behavior in court became a point of contention, with the government suggesting that his reactions, such as laughing and scoffing, might be influencing Ellison due to their history and the power dynamic between them. Cohen, in response, deemed these claims as “ridiculous.”

7. Line of Credit: Ellison revealed that she didn’t know about or authorize the $65.3 billion line of credit that Alameda had with FTX, highlighting potential financial mismanagement.

8. Feelings of Entrapment: Ellison expressed feeling trapped during the summer of 2022, fearing a bank run that could lead to the collapse of both FTX and Alameda. This sense of entrapment was a significant factor in her decision-making.

As the cross-examination proceeded, the pace of questioning led to objections, a visibly irritated judge, and some jurors appearing disengaged. Nonetheless, the testimony provided valuable insights into the relationship dynamics and financial complexities of the case.

The trial continues to unravel the intricate web of events, decisions, and relationships that led to the charges against Sam Bankman-Fried, offering a glimpse into the high-stakes world of cryptocurrency and finance.