Caroline Ellison Drops Bombshell: Bankman-Fried Wanted To Be President

Caroline Ellison, a key figure associated with the cryptocurrency exchange FTX and Alameda Research, on Tuesday testified that Sam Bankman-Fried, the founder of the platform, harbored aspirations of becoming the U.S. president.

Ellison Says She Questioned Use Of Customer Funds In 2020: In her testimony at Bankman-Fried's criminal trial, she shed light on the latter's financial dealings and aspirations and brought to the forefront controversial practices at Alameda and FTX.

When asked what Bankman-Fried told her about his ambitions, Ellison said: "He wanted to be the president."

When asked to clarify, she said: "The United States."

The revelations come at a time when the digital asset industry is under scrutiny, and Benzinga's Future of Digital Assets conference on Nov. 14 aims to address the transformative power and challenges of the cryptocurrency world.

Ellison detailed how coins trading at higher values on Binance BNB/USD were withdrawn from FTX to be sold on the competitor's platform.

When questioned about her concerns regarding Alameda's use of FTX customer funds, she admitted to being apprehensive but felt that customers might not be fully aware.

Ellison said she recalled raising these concerns with Bankman-Fried in 2020, only to be assured that auditors wouldn't focus on such details.

Bankman-Fried's intent behind the audit, Ellison said, was to appeal to investors.

FTX did not disclose the Alameda line of credit to either auditors or investors. Ellison also highlighted the competitive dynamics between FTX and Binance, noting that Binance owned $2 billion in FTX stock.

Bankman-Fried's desire to buy back this stock in the summer of 2021 was driven by concerns that Binance might pose challenges if it retained the stock, she said. 

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The discussions around this buyback took place in a Hong Kong office and involved Sam Trabucco, Alameda's co-CEO.

Ellison's testimony suggests that Bankman-Fried viewed the line of credit as a fund to cater to their needs.

In 2021, Alameda's primary source of funds was loans from third-party crypto lending desks, notably Genesis.

Ellison On FTT Tokens: Discussing the FTT tokens, Ellison said Alameda initially paid nothing for them.

The price later surged from 10 cents in the seed round to $1, and subsequently to $50.

Bankman-Fried emphasized the importance of maintaining the $1 threshold for the FTX Token FTT/USD and suggested buying more if the price dropped below that mark, she said. 

Initially, FTT was not included on Alameda's balance sheet due to the inability to sell the token at the market price, Ellison said.

Yet it was added to the balance sheet to secure loans from Genesis at Bankman-Fried's insistence, she said, adding that she found this decision to be misleading. Despite her reservations, Ellison said she complied with the directive.

Ellison touched upon the "Sam coins," including Solana SOL/USD, in her testimony Tuesday. While Bankman-Fried did not create Solana, he played a significant role in its promotion, she said. 

Among these coins, Solana was more liquid, and Alameda held a substantial portion, Ellison said.

In a revelation toward the end of her testimony Tuesay, Ellison recounted the defendant's views on risk, suggesting he was willing to take extreme risks if the expected value was positive.

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