FTX crypto mogul, Sam Bankman-Fried faces betrayal as ex-girlfriend works with prosecutors in $1.8 billion fraud case
Reportedly, the ex-girlfriend of FTX crypto boss, Sam Bankman-Fried, is collaborating with prosecutors to shape her story after enlisting a legal team and a top lawyer for his $1.8 billion fraud case.
Caroline Ellison, 28, the CEO of Alameda Research, another company founded by Bankman-Fried, is accused of using FTX client money for high-risk trades.
With Bankman-Fried’s impending court appearance in the Bahamas following his recent arrest, Ellison seems to be cooperating with authorities against her former partner.
Former US Attorney Marc Litt suggested that Ellison may be cooperating with investigators as she has “a choice to make.”
Bankman-Fried, facing charges of money laundering and fraud, is described by prosecutors as orchestrating “one of the biggest financial frauds in American history” after the collapse of his billion-dollar digital currency exchange, FTX.
Both Bankman-Fried and Ellison had been in a relationship and were residing with eight other senior FTX and Alameda staffers at Bankman-Fried’s $40 million Bahamas penthouse.
Despite her limited professional trading experience, Bankman-Fried appointed Ellison as CEO of the multibillion-dollar fund in October 2021.
It appears that FTX lent Alameda billions of dollars in clients’ money without their knowledge or consent, sparking a crisis when customers attempted to withdraw their funds, only to find the company unable to fulfill those requests.
Litt suggested that Ellison may be cooperating with the government to protect herself, as prosecutors investigate whether FTX misused billions of dollars in client funds by transferring them to Alameda.
Ellison has hired Stephanie Avakian, former director of the US Securities and Exchange Commission’s Division of Enforcement.
Litt expressed that there’s a sense of urgency for cooperation, stating, “It’s in her interest to spin her narrative and tell her story before everybody else that the government talks to, points the finger at her, so she has every incentive to cooperate and get the benefits of cooperation.”
Bankman-Fried will be appearing in court to agree to extradition to the US and faces a potential sentence of up to 115 years if convicted of all eight charges in the United States.