On the second day of her testimony, Caroline Ellison shed tears while recalling her role in building SBF’s multibillion dollar fraudulent crypto empire.
Caroline continued revealing on Wednesday that her wrongdoings as Alameda CEO, which all she exclaimed “because Sam told me to.”
Following the crash of the Luna token in May 2022, several creditors were calling back their loans made to Alameda. She did pay back all these creditors using Alameda’s FTX credit line on the instructions of her ex-boyfriend cum boss – Sam Bankman-fried.
She clarified, knowing that all the money coming from FTX was customer funds. “I was concerned that if everyone would find out, then everything would come crashing down.”
While mentioning the Alameda balance sheet, which unfolded the felony and eventually began the fall of both FTX and Alameda Research, Caroline said that it was designed to mislead investors and make them believe Alameda is doing fine on its side.
The sheet was, however, ugly enough to raise questions as it included SBF’s ‘pocket-tokens’ that concerned whether they were all really liquid or not. The “dishonest” document “showed that Alameda was in a fairly risky position,” Caroline said.
$100M To Bribe Chinese Official
Speaking on SBF’s alleged bribing of Chinese officials, Caroline said that FTX and Alameda executives paid a huge amount in order to unlock funds on Chinese exchanges.
Although neither FTX nor Alameda was involved in the investigation as it involved a firm which was engaged in trading with Alameda and it was probed for money laundering.
As they failed in unlocking funds via negotiations with the Chinese government, the team employed a scheme of creating fake accounts on exchange using Thai prostitutes’ identities, which was also all in vain.
The funds were at last relieved after Caroline made a payment of $100 million to a crypto account presumably of Chinese officials. The payment was made in November, 2021 according to a memo entry noted by Caroline.
Praying For the Downfall of Binance
Before the court took lunch break, the government prosecutors presented a memo authored by Caroline which contained “getting regulators to crack down on Binance.”
Speaking on which, Caroline said that Sam thought Binance’s falling was one of the best ways to increase FTX’s market dominance among crypto exchanges. “Regulators had been promising him this would happen for a while,” she confessed.
Binance, the largest crypto exchange, has been in government’s radar since FTX’s collapse in November, 2022. This also fueled the Binance-FTX rivalry all out of nowhere when FTX nearly crashed.
Caroline’s testimony was much important throughout this trial which made her feel relieved as the fraud became public and she did not have to lie anymore.
“I felt indescribably bad about all the … people that lost their jobs … and the people that trusted us that we had betrayed,” She said with almost sobbing while her ex-lover SBF did not look up to her at all and continued typing notes on the laptop.
Also Read: Caroline Ellison Says SBF Directed Her To Commit Fraud
