Caroline Elison: Bankman-Fried `Directed Me To Commit These Crimes'

Caroline Ellison, the former CEO of Alameda Research took the stand on Tuesday and during the brief time that she testified, revealed that the now-defunct crypto hedge fund has an "essentially unlimited" line of credit at FTX.

Ellison, the 28-year-old Stanford University alumnae who is an insider in both the personal and professional life of Bankman-Fried admitted to the court that along with the FTX founder, they defrauded customers, lenders and investors of the now-defunct crypto exchange platform.

"He directed me to commit these crimes," Ellison said, wearing a dark pink dress and a gray coat, when asked by the prosecution whether she had committed crimes and with whom she committed them with.

Ellison, who took the witness stand in a packed federal courthouse in Manhattan, disclosed the "essentially unlimited" line of credit Alameda Research had at FTX and claimed that Bankman-Fried "set up the systems and told us to take the money."

During the initial testimony, Ellison said that Bankman-Fried told her to use the deposits of FTX customers to repay loans and fund investments by Alameda Research and disclosed that the trading firm borrowed around $14 billion before the crypto exchange collapsed but wasn't able to repay all of it.

"I sent balance sheets at the direction of Sam that made Alameda's balances look less risky to investors," Ellison further revealed.

When Ellison took the stand, a federal prosecutor asked her to identify Bankman-Fried in the courtroom. She took a few seconds scanning the room then pointed at the disgraced crypto mogul and said, "he's over there."

Ellison testified after the testimony of Gary Wang, the mysterious co-founder of FTX who admitted last week that he wrote the programming that enabled the crypto exchange's fraud.

Both Wang and Ellison are in the inner circle of Bankman-Fried.

Both pleaded guilty to conspiracy charges last year, shortly after Bankman-Fried was extradited to the U.S. from the Bahamas.

Bankman-Fried's defense team is anticipated to cross-examine Ellison late Tuesday or on Wednesday with the aim to discredit her.

It may be recalled that in his opening statement, Bankman-Fried's lawyer Mark Cohen underlined that Ellison ignored instructions from Bankman-Fried to hedge on Alameda Research's trading.

"His girlfriend will tell you how they stole money together," Assistant United States Attorney Thane Rehn said in his opening statement, emphasizing Ellison's crucial role in the case.

After the jury left the courtroom, Bankman-Fried "looked straight ahead, then closes his air-gapped laptop. He walks back into the holding cell."