Caroline Ellison Reveals SBF's Aims for the Presidency

In December 2022, Ellison pleaded guilty to several charges, including fraud and money laundering. Soon after, she agreed to a plea agreement, vowing full cooperation with prosecutors. 

At the onset of the trial, the focus shifted to the role of the defendant, Sam Bankman-Fried. Caroline described him as the driving force behind Alameda, guiding her towards unlawful activities. Concurrently, she conceded her own missteps, acknowledging she redirected billions from FTX's clients for investment pursuits.

Delving deeper, Ellison revealed that Alameda had borrowed nearly $10 billion in FTX's customer funds. Given that clients had deposited a total of $13 billion into the exchange, it means that only $3 billion (under 25%?!) was readily available for withdrawal.

According to Ellison, Alameda used the FTX funds to convert stablecoin, make investments, and repay its debts.

The issue of handling creditors was notably challenging. Ellison testified that there were concerted efforts to adjust their balance figures, aiming to portray Alameda Research's finances as less perilous to these lenders. For context, they juggled seven different balance sheets, especially tailored for the company, Genesis. They conveniently kept under wraps the hefty $10 billion debt to FTX's clients.

What's more intriguing is that the funds borrowed from FTX weren't just channeled to Alameda's operations. Several employees also had a share. Ellison mentioned an intended loan of $3.5 million set aside for her. Furthermore, an allocation of $35 million was set for Ryan Salame, the co-director of the now insolvent exchange. Ellison highlighted how Salame used these resources, funneling considerable donations to both Republican and Democratic political parties in the U.S.

The attorney delved into Caroline Ellison's ties with Sam Bankman-Fried. She shared that their relationship had taken a romantic turn back in the summer of 2020. 

However, here’s a more captivating detail from the courtroom:

Assistant U.S. Attorney: “What did [Bankman-Fried] tell you about his ambitions?” 
Ellison: “That he would be President.” 
Assistant U.S. Attorney: “Of what?”

Ellison: “The United States.”

Over time, the bond between Ellison and SBF began to fade. Caroline remarked that he seldom devoted much time to their relationship.

Ellison testified that her salary was $200,000. On top of that, she was awarded a generous bonus of $21 million in 2021. She used this amount by investing $10 million in a startup, donating $100,000 to her parents, and earmarking $2 million for her personal charitable trust. 

Ellison also testified that she had no equity stake in Alameda, but possessed a 0.5% stake in FTX.