How Caroline Ellison became celebrated Alameda CEO before being exposed as fraudster and testifying against ex-boyfriend Sam Bankman-Fried

Before nan monolithic illness of FTX and Alameda Research, Caroline Ellison was celebrated arsenic a Stanford mathematics whiz who reached nan apical of nan crypto ladder by property 28.

But arsenic nan world learned she utilized nan finance patient she led arsenic a individual piggy slope for her ex-boyfriend Sam Bankman-Fried, an image emerged of a young woman who was wholly unequipped for a CEO position successful nan crypto speech industry.

In nan hopes of receiving a lesser condemnation for her ain domiciled successful nan monolithic scam, Ellison pled blameworthy to fraud and testified successful Bankman-Fried's fraud proceedings past month, claiming he directed her to chimney $14billion successful customer costs from Alameda to FTX.

The girl of MIT economical professors, Ellison became progressive pinch Bankman-Fried's doomed business successful March of 2018, while she was an intern for Jane Street, a boutique finance patient wherever he worked arsenic a trader.

The 2 bonded complete their liking successful 'effective altruism' - nan thought of getting rich | successful bid to springiness billions to charity. 

'The thought was that nan champion point for nan world is for maine to go highly wealthy, and past donate it…it's incredibly self-serving,' Tom Gill, a erstwhile trader astatine Jane Street told Forbes.

Over java successful Berkeley, California, Bankman-Fried asked Ellison to subordinate Alameda Research, a integer rate hedge money that he wanted to usage to utilization nan differences successful in pricing for Bitcoin successful different countries. He reportedly claimed he wanted to make billions to springiness to charity. 

Ellison said successful tribunal that she and Bankman-Fried first slept together successful nan autumn of 2018 and past dated from summertime 2020 to summertime 2021 and that she dumped him because he was 'distant' and for 'paying attraction to her.' 

She had only 18 months of trading acquisition erstwhile she moved to Alameda. She became co-chief executive of Alameda successful 2021 - astatine nan clip she and Bankman-Fried were 'on a break' - and main executive successful 2022. 

Bankman-Fried had started FTX 2 years aft founding Alameda Research successful a bid to create what he saw arsenic a a modern cryptocurrency exchange. He yet decided to measurement distant from Alameda to attraction full-time connected FTX and earned fame arsenic a 'crypto czar' - pinch celebrities for illustration Tom Brady promoting nan caller exchange.

By nan summertime of 2021, nether Ellison's leadership, Alameda was trading around $5 cardinal a time and she was featured connected Forbes' 20 Under 30 list. 

In interviews depicting her arsenic a young mathematics genius, Ellison often said of nan value of being 'comfortable' pinch taking risks successful bid to find master success. 

'Being comfortable pinch consequence is very important,' Ellison said connected a podcast successful 2022. 'There are a batch of group who are very smart, but aren't good, necessarily, astatine nan messy world of trading—especially crypto.'

Just a fewer months aft becoming nan sole CEO of Alameda, nan trading patient and FTX were exposed arsenic scams.

After nan FTX crash, attraction turned to Alameda's $10 cardinal successful assets and claims nan patient funneled FTX's customer's money to make risky investments. 

Soon, Ellison's demeanor and quotes, initially seen arsenic precocious genius, were seen arsenic grounds of malpractice.

'This was very overmuch like, oh, yeah, we don't really cognize what we're doing,' she had told Forbes astir Alameda's occurrence earlier nan fall.

She moreover erstwhile bragged that she needed only 'elementary people math' to tally nan patient and claimed to dislike communal trading safeguards specified arsenic stop-loss orders, a measurement of capping losses and reducing risk.

The full cognition has been described arsenic being 'run by a pack of kids successful nan Bahamas'. According to CoinDesk she was among nan 9 friends who lived pinch nan erstwhile tycoon successful a luxury penthouse successful nan Bahamas.

Bankman-Fried and Ellison apparently weren't nan only brace getting cozy successful nan Bahamas, pinch reports that nan group were each making love each other. 

Ellison was calved and raised successful Boston pinch her begetter Glenn Ellison, MIT's caput of economics, and Sara Fischer Ellison, an economics teacher astatine nan prestigious university.

In a now-deleted Tumblr station called called WorldOptimization, Ellison she wrote that 'women are amended suited to being homemakers and rearing children than doing Careers.'

In a database she titled, '~cute boy things,~' Ellison added: 'controlling astir awesome world governments.'

Ellison had besides written astir her exploration of polyamory, which she said lead her to judge 'everyone should person a ranking of their partners, group should cognize wherever they autumn connected nan ranking, and location should beryllium vicious powerfulness struggles for nan higher ranks.'

In what prosecutors person calling ' 1 of nan biggest financial frauds successful American history FTX reportedly lent Alameda billions successful clients' money without their knowledge aliases permission. The situation astatine FTX was triggered erstwhile customers rushed to retreat their costs but nan institution couldn't salary out.

Testifying arsenic nan prosecution's prima witness, Ellison said that Bankman-Fried group up nan machine strategy loopholes that allowed nan fraud to return place. 

In an unpublished 250-page memo, Bankman- Fried blamed Ellison for nan fraud, aiming she was sick equipped for nan domiciled he gave her, and she refused to instrumentality his trading strategies that would person prevented nan collapse.

He wrote: 'She continually avoided talking astir consequence guidance — dodging my suggestions — until it was excessively late... Every clip that I reached retired pinch suggestions, it conscionable made her consciousness worse. I'm judge that being exes didn't help.

According to nan memo, nan couple's narration ended 'the aforesaid measurement astir of my relationships extremity - They want much intimacy and committedness and nationalist visibility than I do, and I consciousness claustrophobic.'

Bankman-Fried based on Alameda would person stayed solvent if Ellison had agreed to hedge its fierce trading strategy, arsenic he claims he suggested.

'If Alameda had hedged, it would person remained solvent and prevented nan full unhappy story,' he wrote.

Ellison, 28, told a New York tribunal past twelvemonth that she ran Alameda Research and fundamentally had entree to an 'unlimited' magnitude of FTX customer money.

She pleaded blameworthy to fraud charges, confessing she agreed pinch Bankman-Fried to springiness 'materially misleading financial statements' successful bid hide nan statement - which she knew was illegal.

Bankman-Fried, 31, has denied 13 counts betwixt 2019 and 2011 including ligament fraud, money laundering and violations of run finance laws which could spot him jailed for 115 years.

Assistant US Attorney Danielle Sasson asked Caroline Ellison what Bankman-Fried said astir spending money connected politics.

Ellison said: 'He thought it was very effective, you could get very precocious returns successful position of power by spending comparatively mini amounts of money.

'He donated $10million to (Joe) Biden and that was a comparatively mini magnitude of money. He felt that was thing that sewage him power and recognition.