Sam Bankman Fried allegedly entertained a plan to raise capital from Saudi Crown Prince Mohammed bin Salman, according to former Alameda CEO Caroline Ellison in her testimony on Wednesday.
It’s one of many bombshells dropped by Ellison on the second day of her testimony in the lower Manhattan court, depicting just how dire things were in the final days of FTX.
Ellison claims that Bankman-Fried was looking to sell FTX equity in order to create liquidity at the cryptocurrency exchange, according to The Wall Street Journal.
Ellison was Bankman-Fried’s former top deputy and love interest just over a year ago but has now become the star witness in the prosecution’s case against FTX. “He directed me to commit these crimes,” said Ellison on Tuesday, pleading guilty.
Alameda Research was borrowing upwards of $13 billion from FTX in June of 2022, according to Ellison’s testimony. Bankman-Fried pressured Ellison to find ways to spin the balance sheet differently.
The former Alameda Research CEO found out about the large customer withdrawals made in November of 2022 via a Signal chat with SBF and FTX’s former Director of Engineering Nishad Singh. Ellison was terrified to hear that customers had withdrawn $1.25 billion in a single day. Singh, himself, is expected to testify later in the trial, which could last up to six weeks.
FTX and Alameda Research co-founder Gary Wang, who also testified this week, stated that FTX’s balance sheets were even worse than they seemed at the time, according to Axios.
At times, Ellison delivered a teary-eyed testimony, in which she recalled the traumatic experience of working at Alameda Research in its final months. Ellison is facing fraud charges as well and is hoping to have her sentence reduced through her cooperation with the prosecution.