In the fraud and money laundering trial of FTX founder and former boss Sam Bankman-Fried, no witness garners as much attention as Alameda Research chief executive and former Bankman-Fried squeeze Caroline Ellison.
Ellison pleaded guilty to wire fraud and money laundering on FTX customers while head of Alameda Research, the sister firm of cryptocurrency exchange FTX.
As part of her plea deal, she agreed to throw Bankman-Fried under the bus, following in the footsteps of former colleague Gary Wang.
As early as November 2022, Ellison admitted: “I agreed with Mr Bankman-Fried and others to provide materially misleading financial statements to Alameda’s lenders… I am truly sorry for what I did. I knew that it was wrong.”
She also admitted to knowing it was illegal.
Ellison is unlikely to pull punches in her testimony, expected to take place this Thursday.
Bankman-Fried thought it was a good idea to leak her private diary entries to the New York Times in July, a move that saw his bail revoked.
The diary leaks painted a somewhat sympathetic picture of Ellison, in which she discussed being ill-equipped to run Alameda Research while expressing feelings of joy over Alameda’s and FTX’s pending collapse.
While her testimony may not come with any shocking new revelations, it will definitely be able to influence the jury’s perception of Bankman-Fried from a personal angle.
“She’s going to establish that not only did Sam operationally know what was going on but that he was lying about it,” said former federal prosecutor Adam Kamenstein. “It’s going to be game over.”
Defence is attempting to paint Bankman-Fried as an out-of-his-depth goofball rather than a malicious plotter.
That narrative may be irrevocably punctured when Ellison appears in court today.