Caroline Ellison Faces Cross-Examination in Sam Bankman-Fried’s Trial

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By  Milcah   Tanimu

NEW YORK, Oct 12 (Reuters) – Caroline Ellison, a confidant of Sam Bankman-Fried, will once again take the stand at the trial of FTX founder Sam Bankman-Fried on Thursday. During her testimony, she may be subjected to questions about her decision to cooperate with prosecutors against her former boss and romantic partner.

Ellison, the former co-chief executive of Bankman-Fried’s crypto hedge fund, Alameda Research, has been providing testimony since Tuesday. She has been detailing her role in a multibillion-dollar fraud case that prosecutors allege was orchestrated by Bankman-Fried at his now-defunct cryptocurrency exchange.

Over the course of two days on the witness stand, Ellison, who assumed leadership at Alameda in 2021, testified that the hedge fund utilized $10 billion in FTX customer funds to repay its debts and make investments. Tearfully, she expressed living in “dread” of the truth coming to light, and the collapse of FTX last year brought her an “overwhelming feeling of relief.”

Bankman-Fried’s attorney, Mark Cohen, is expected to continue cross-examining Ellison, a process that began briefly on Wednesday before jurors were dismissed for the day.

Prosecutors allege that Bankman-Fried, 31, misappropriated billions in customer funds to support Alameda, purchase real estate, and donate over $100 million to U.S. political campaigns. FTX’s demise and bankruptcy declaration in November 2022 shocked financial markets and tarnished Bankman-Fried’s reputation.

Bankman-Fried has pleaded not guilty to two counts of fraud and five counts of conspiracy, maintaining that while he made mistakes in managing FTX, he had no intention of misappropriating funds.

Ellison, a 28-year-old Stanford University graduate, is one of three former members of Bankman-Fried’s inner circle who have pleaded guilty to fraud charges and agreed to cooperate with the Manhattan U.S. Attorney’s office.

Earlier in the trial, Gary Wang, FTX’s former technology chief, testified that Bankman-Fried falsely tweeted that FTX was “fine” in November as the exchange faced surging demand for withdrawals. A third cooperating witness, former FTX engineering chief Nishad Singh, is also expected to testify at the trial, which could extend for up to six weeks.

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