Caroline Ellison, the star witness in the prosecution of former FTX co-founder Sam Bankman-Fried, is in court in New York and is expected to take the stand Tuesday.
Ellison was the co-CEO of Alameda Research, the crypto trading firm that was affiliated with the FTX exchange. She’s also Bankman-Fried’s ex-girlfriend.
She is testifying shortly after FTX co-founder Gary Wang, also a witness for the prosecution. Both were charged with a series of financial crimes in December, and Ellison pleaded guilty to two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering.
The Securities and Exchange Commission said in December that, at Bankman-Fried’s direction, Ellison manipulated the price of a digital token that FTX had issued, and then used it as collateral for undisclosed loans that Alameda took from FTX. That means Alameda, the trading firm, was secretly using the money of FTX customers to cover losses it had sustained.
That meant Alameda was telling investors it had more collateral on loans than it really did, making the FTX exchange look safer than it was.
Ellison, like Wang before her, is cooperating with the government in exchange for a reduction in her sentence. Without such a deal, both faced sentences that could have kept them in prison for the rest of their lives.
Ellison and Wang both had close personal relationships with Bankman-Fried, or SBF, who appeared distressed at times by Wang’s testimony against him.
Bankman-Fried was sent to jail in August in advance of the trial after the government accused him of witness tampering. He had purportedly leaked letters from Ellison to The New York Times.
Source: | This article originally belongs to Nbcnews.com
