Ellison Testifies Bankman-Fried Was “Freaking Out” About Inability To Raise Capital From Saudis

On her third day of testimony former Alameda Research Chief Executive Officer Caroline Ellison detailed more interactions with Alameda employees and how SBF was “freaking out” over not being able to raise cash from the Saudis. Her testimony also expounded on the hole in FTX’s balance sheet and the internal stress constantly shuffling loans caused at FTX and Alameda. 

Bloomberg said Thursday that Ellison looked “more relaxed than in previous days” of testimony. We guess once you’ve detailed how you used the IDs of Thai hookers to set up fake crypto accounts to bribe the Chinese government, the rest of the fraud admissions just seem like easy work and just kinda roll off the tongue. 

Among the items brought to light on day 3 of her testimony was the claim that SBF wouldn’t let her quit when she wanted to. Ellison said in court: “He said I couldn’t I was too important to Alameda and I should stay at Alameda.”

On Thursday Ellison said she admitted to Alameda employees that the company likely wasn’t going to make it: “A lot of employees had been asking me about what was going on or what the implications was for them. I was hoping that some might stay, but if my goal was to get them to stay, I would have asked them to stay. My goal was to inform Alameda employees what had been going on and what the implications were.”

She said the employees were grateful she was “open and honest with them.”

She detailed more on Thursday about how SBF was “freaking out” about not being able to raise money from Mohammed bin Salman: “He told me he went to the Middle East and tried to raise funds there but it didn’t sound like he had success.” We had detailed in yesterday’s testimony that MBS was one place where FTX was potentially looking to raise capital. 

Ellison again talked about how she was worried about Alameda’s lenders recalling loans in summer 2022. Talking about the 7 alternate balance sheets she used with FTX to lie about the company’s financial position, Ellison said Thursday: “I don’t recall if we discussed all of them, I know we discussed some.”

She also told the jury how she wasn’t “as good a manager as she could be”, Bloomberg wrote. Ellison said in court: “By limiting factors in scaling I meant those were things that were preventing Alameda from doing as well and making as much money as we could. I thought the biggest factor was that [Sam] Trabucco and I weren’t as good managers or leaders as we could be and we weren’t pushing employees to you know make new things or do better in the way that I wished we were.”

Ellison also admitted that Alameda had an “improper advantage” from being so close to FTX and having access to customer funds. In 2022, she had told Bloomberg that the entities were walled off from each other: “We definitely have a Chinese wall in terms of information sharing to ensure that no one in Alameda would get customer information from FTX or anything like that, or any sort of special treatment from FTX. It’s very important for FTX to be perceived as a fair, neutral marketplace where everyone gets an equal shot.”

She said that communication broke down between her and SBF after their breakup, stating in court Thursday: “I tried to avoid [one on one conversations] and avoid spending much time in social settings. We talked sometimes outside of work. He still lived in the same apartment, so it’s hard to avoid that entirely.”

“There were periods of time when he wasn’t paying attention to Alameda,” she also testified, helping make the point from the defense that SBF was not always aware of Alameda’s daily operations. 

Ellison claimed she was unaware of government probes into FTX and Alameda until after a November meeting. She testified that the FBI confiscated her mother’s and boyfriend’s computers, both of whom were also involved with Alameda and FTX. Ellison pleaded guilty and agreed to cooperate with prosecutors in December after multiple meetings, including a lengthy one this Monday.

Recall, we detailed Ellison’s sordid second day of testimony earlier, wherein she talked about falsely using the IDs of Thai hookers to bribe Chinese officials and how even FTX’s fabricated balance sheets, laden with FTX’s FTT token and other tokens closely affiliated with Bankman-Fried, were concerning. 

On Wednesday, @teddyschleifer reported on X that “Caroline Ellison testified that Sam Bankman-Fried ordered her to lie in mid 2022 to Genesis, one of FTX’s lenders, about Alameda’s balance sheet,” he wrote. “Caroline prepared a bunch of bullshit balance-sheets that they could send, and Sam chose ‘Alternative 7’ as the best lie of the bunch.”


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