“Diary” of Ex-Alameda Research CEO Emerges as Key Evidence in Fraud Trial Against FTX Founder
In a startling development, a personal “diary” belonging to Caroline Ellison, former CEO of Alameda Research and ex-girlfriend of Sam Bankman-Fried, has emerged as a vital piece of evidence in the upcoming fraud trial of the disgraced FTX founder. This personal notebook, along with electronic documents written by Ellison, has reportedly been obtained by prosecutors and is seen as crucial in building their case against Bankman-Fried, who is set to face trial in October.
According to sources familiar with the matter cited by the New York Times, Ellison’s diary contains handwritten observations, some of which reportedly express personal and professional resentment toward her former lover. This discovery adds an intriguing dimension to the case, as Ellison, who pleaded guilty to fraud charges last year, is now expected to testify against Bankman-Fried.
Former federal prosecutor Moira Penza highlighted the potential risks associated with relying on a cooperating witness, stating, “The biggest risk with a cooperator is the defense will be able to say here she is cooperating to save herself from a long prison term. But modern juries are not likely to take at face value they are testifying because of a vendetta or a failed romance.” Ellison faced a maximum prison term of 110 years before agreeing to cooperate with prosecutors, who alleged that she, Bankman-Fried, and other close associates covertly used FTX customer funds to support risky bets at Alameda, a sister cryptocurrency hedge fund. The scrutiny surrounding Ellison’s relationship with Bankman-Fried intensified during FTX’s collapse into bankruptcy in November.
CoinDesk previously reported on the controversial partnership between Bankman-Fried and Ellison, describing them as part of a “cabal of roommates” who operated a vast cryptocurrency empire from a luxurious penthouse in the Bahamas. The revelations about their unconventional living arrangements drew significant attention at the time.
Caroline Ellison’s personal writings have already attracted public interest, with reports last year highlighting her tweets about “regular amphetamine use” in 2021. Additionally, internet sleuths uncovered what appeared to be Ellison’s personal Tumblr blog, which contained explicit references to polyamory. The blog was subsequently deleted.
The trove of evidence compiled by prosecutors is substantial, comprising over six million pages of emails, Slack messages, and other digital records. This collection of documents is reported to be one of the largest ever secured in connection with a white-collar securities fraud case.
Neither Ellison’s attorney nor representatives for Bankman-Fried provided immediate comments on the matter. Bankman-Fried’s legal team recently requested a Manhattan federal court to dismiss ten of the thirteen charges against him, arguing that the government had engaged in a “rush to judgment.” They further contended that the civil and regulatory processes should have been allowed to address the situation instead of transforming it into federal criminal charges prematurely.
As the trial approaches, the revelations from Caroline Ellison’s diary and other electronic documents promise to add a compelling layer to the already high-profile case against Sam Bankman-Fried. The outcome of this trial could have significant implications for both the cryptocurrency industry and the broader realm of white-collar securities fraud.
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