Caroline Ellison writes about former crypto mogul Sam Bankman-Fred



Three months earlier than the cryptocurrency market exploded final yr, Caroline Allisonthe 27-year-old chief govt of crypto hedge fund Alameda Analysis, was racked with self-doubt.

“I’m fairly sad and overwhelmed with my job,” Ms. Ellison wrote in a Google doc in February 2022. He added: “On the finish of the day I can not wait to go dwelling and switch off my cellphone and have a drink and get away from all of it.”

Ms. Allison had quite a bit on her thoughts. She did not suppose she was match to run Alameda or was a very decisive chief, she wrote in one other Google doc. She was additionally going by a breakup Sam Bankman- Freud, the billionaire entrepreneur who based Alameda after which FTX, one of many world’s largest cryptocurrency exchanges. That they had dated on and off, and Ms Allison was anxious about “making issues awkward” and “inflicting drama”.

“It would not actually really feel like there’s an finish in sight,” he wrote in a February 2022 doc.

Now Ms Allison is ready to be a star witness at Mr Bankman Fred’s prison trial, which is because of happen on October 2.

Mr. Bankman-Fried, 31, is accused of misappropriating billions of {dollars} taken from shopper accounts and faces eight counts of fraud and election regulation violations. Her spectacular fall, which despatched FTX and Alameda out of business, remodeled Ms. Ellison from a robust — but comparatively personal — determine into the goal of tabloid hypothesis. In December, she Pleaded guilty to fraud charges And agreed to cooperate with federal prosecutors investigating her ex-boyfriend.

His case is transferring quickly towards a courtroom showdown in Manhattan. Two different high FTX executives, Nishad Singh and Gary Wang, additionally pleaded responsible and agreed to cooperate. in June, After weeks of legal wrangling On the costs in opposition to Mr. Bankman-Fried, the decide within the case set an accelerated schedule for the trial, asking prosecutors to give you an inventory of witnesses and different last supplies. Prosecutors count on to start getting ready at the least some witnesses in August, two folks with information of the matter mentioned.

As Mr. Bankman-Fred’s someday girlfriend and one among his earliest hires, Ms. Ellison had distinctive perception into the founding of FTX. He additionally recorded lots of his ideas in writing, observations about his private {and professional} life in a handwritten diary and on Google Docs which were circulating amongst legal professionals concerned within the case, based on paperwork reviewed by The New York Occasions and 4 folks acquainted with the matter.

The paperwork, which haven’t been beforehand reported, supply new insights into Ms. Ellison’s psyche in the course of the last months of FTX. Ms Allison, now 28, was one Advanced writer His Tumblr posts about Harry Potter and Jane Austen are broadly shared. However the Google paperwork are extra private and uncooked, a few of which refer on to Mr. Bankman-Freud, illustrating the complexity of their relationship and his ambivalence about Alameda.

In a Google doc addressed to Mr. Bankman-Fried in April 2022, Ms. Ellison wrote {that a} earlier breakup with him had “considerably dampened my enthusiasm for Alameda.” Life on the hedge fund, he added, “felt relatable to you in a manner that was painful.”

A consultant for Ms. Ellison’s authorized group and a lawyer for Mr. Bankman-Fred declined to remark. A spokeswoman for the U.S. Legal professional’s Workplace for the Southern District of New York in Manhattan, the case’s prosecution unit, additionally declined to remark.

Ms. Ellison, a Stanford graduate, grew to become acquainted with Mr. Bankman-Fred. Jane Street, quantitative buying and selling agency the place he labored after school. They shared a dedication to efficient altruism, Charitable movement It has gained followers within the tech and finance industries.

Mr. Bankman-Fried then left to start out Jean Road Alameda in 2017, he employed Mrs. Ellison as a service provider. In 2021, he advanced He was additionally co-chief govt, together with one other startup rent, Sam Trabuco.

Mr. Bankman-Fred and Ms. Ellison additionally started a unstable romantic relationship, with a number of breakups and reconciliations. At occasions, Ms. Ellison anxious that Mr. Bankman-Freud thought she was not ok. When he was round, he wrote in a February 2022 Google Doc, he had an “intuition to shrink and be small and quiet and deal with others.”

After an altercation, Ms. Allison lower off contact with Mr. Bankman-Fred. “I really feel very damage/rejected,” he wrote in an April 2022 Google doc. “Do not let the contact you need really feel the one manner I can get a way of energy.”

By final yr, Mr Bankman-Fried had change into one of many world’s most outstanding crypto-entrepreneurs, his face plastered on billboards and journal covers. His repute appears to make life at FTX and Alameda tough for Mrs. Allison.

Residing means “being round you on a regular basis, telling folks how nice you’re on a regular basis,” he wrote within the April 2022 doc.

Ms. Allison was compensated with much less generosity than FTX and different high executives of Alameda, though it’s not clear that she was conscious of it. In response to court docket paperwork, the change’s founder and different key workers acquired $3.2 billion in funds and loans. Of that whole, $6 million went to Ms. Ellison, in contrast with $587 million for Mr. Singh, FTX’s head of engineering, and $246 million for Mr. Wang, one among them. Mr. Bankman-Fried acquired $2.2 billion.

In Could 2022, J The crypto market crashed, driving up coin costs and sending many outstanding firms out of business. In the course of the disaster, the regulator has asserted, Mr. Bankman-Fried, Mr. Wang, Mr. Singh and Ms. Ellison crammed a gap in Alameda’s accounts through the use of billions in buyer funds deposited with FTX.

Even earlier than that, Ms. Ellison doubted her skills. Within the April 2022 doc, he made an inventory of areas the place he struggled, together with “management” and “judgment.”

“I do not really feel like working Alameda comparatively worthwhile or handy to do,” he wrote.

By final fall, Mr. Bankman-Fried had misplaced confidence in Alameda. He thought of closing the agency, based on court docket data, and invested greater than $400 million in it Another trading companyModulo Capital, led by a special ex-Jane Road dealer, whom he additionally dated.

In a few of her writings, Ms. Ellison expressed jealousy and resentment towards Modulo, in addition to a sense that she was being squeezed, by two individuals who had seen the doc.

Mr. Bankman-Fred’s enterprise empire collapsed in November when the filings revealed an $8 billion loss.

“I simply had a rising dread of this present day weighing on me,” Ms. Allison wrote to him in a message that month, which was transcribed in court docket data. “Now that it is really taking place, it simply feels so good to complete it.”

In December, Mr. Bankman-Fred was arrested within the Bahamas, the place FTX was primarily based, and took him to a jail not removed from the posh penthouse he and Miss Allison shared with eight different roommates, together with Mr Wang and Mr Singh. Mr. Bankman-Fred is now underneath home arrest at his mother and father’ dwelling in Palo Alto, California.

Those that know Ms. Ellison say they’re impressed by her laborious work and her willingness to confess her personal failings. In court docket in December, she said She was “actually sorry” for dishonest. “I knew it was improper,” he mentioned.

Ms Ellison is anticipated to repeat that declare at Mr Bankman-Fried’s trial, which is anticipated to final 4 or 5 weeks. A lot of the trial will revolve round messages that Mr. Bankman-Fried and three co-workers exchanged on the messaging app Sign, two folks briefed on the matter mentioned.

As a girl within the male-dominated crypto business, Ms. Ellison may present extra empathy to the jury than different contributors, legal professionals acquainted with the case mentioned. Within the interview last yearMr. Bankman-Fried positioned a few of the blame for the collapse on Alameda, saying he had little involvement within the day-to-day administration of the hedge fund.

Maura Penza, a former federal prosecutor, mentioned the very best authorities collaborators accepted the cost on the witness stand and that the “energy differential” between Ms. Ellison and Mr. Bankman-Fred may make her sound overwhelming.

“This doesn’t strike me as an efficient technique to incriminate the defendant,” Ms. Panza mentioned. “Particularly with somebody who was as soon as a romantic companion.”


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