Caroline Ellison caught on secret recording blaming Sam Bankman-Fried for FTX collapse: prosecutors

Caroline Ellison, the former girlfriend of disgraced FTX founder Sam Bankman-Fried, was secretly recorded as she blamed her ex for a fateful choice to make use of buyer funds to plug monetary holes within the crypto large’s failed hedge fund, in line with court docket paperwork.

The recording of Ellison, the former CEO of Alameda Research, the hedge fund by which Bankman-Fried allegedly used FTX buyer funds to make dangerous bets, was made by an Alameda worker throughout an all-hands assembly on Nov. 9.

Simply days earlier than FTX, the cryptocurrency exchange that was once worth as much as $32 billion, went bankrupt, 28-year-old Ellison convened workers to supply a “common overview of the scenario,” telling them: “I suppose, principally I wanna say, like, I’m sorry. This actually sucks.”

“I believe my present default plan is that Alameda will seemingly wind down as soon as we will, like, repay all of our collectors and form of wind down a bunch of our, like, no matter remaining obligations we’ve,” Ellison is alleged to have informed her workers.

Based on the court docket submitting, an Alameda worker pressed Ellison: “Who made the choice on utilizing [FTX] consumer deposits?”

“Um…Sam, I suppose,” Ellison responded, in line with court docket paperwork filed in US District Court docket in southern New York.

Ellison can be mentioned to have stored a memo titled “Issues Sam is Freaking Out About” — the contents of which federal prosecutors plan to introduce into proof at trial this fall, in line with a latest court docket submitting.

Ellison, who pleaded responsible to wire fraud and cash laundering in December, is predicted to testify at her former lover’s trial, which is scheduled to start in Manhattan federal court docket on Oct. 2.

Prosecutors filed court docket papers on Monday indicating that the memo is one in all a number of items of proof they declare proves that Bankman-Fried defrauded FTX clients in an effort to cowl losses incurred by Alameda.

Bankman-Fried, 31, who had been under house arrest at his mother and father’ Bay Space residence whereas awaiting trial, had his bail revoked by the judge overseeing his case final week after he allegedly leaked parts of Ellison’s personal diary to a New York Instances reporter.

The previous FTX CEO, who on the peak of his wealth was price an estimated $17 billion, was remanded over the weekend to the notorious Metropolitan Detention Center in Brooklyn — the identical federal jail cell that housed convicted intercourse trafficker Ghislaine Maxwell, reputed pedophile R. Kelly, and “Pharma Bro” Martin Shkreli.

Ellison reportedly confessed in her diary that her on-again, off-again relationship with Bankman-Fried was “inflicting drama.”

She detailed her unhappiness and discomfort with their relationship earlier than the agency imploded final November in a sequence of Google paperwork, in line with the New York Times, which has seen the posts.

In a single entry from February 2022, Ellison wrote that the star-crossed lovers have been prone to “making issues bizarre” and “inflicting drama” on the firm, worrying “it doesn’t actually really feel like there’s an finish in sight,” the Instances reported.

The publication of her alleged personal writings infuriated federal prosecutors, who accused Bankman-Fried of witness tampering and requested a choose to subject an order that might bar the previous billionaire and different events from making public statements more likely to intervene with a good trial.

Bankman-Fried has denied any wrongdoing and pleaded not responsible to the array of prices.

The Submit has sought remark from Bankman-Fried.

Extra Reporting By Thomas Barrabi