In a recorded meeting, Sam Bankman-Fried’s ex Caroline Ellison blamed him for FTX’s collapse.

In a recorded meeting, Sam Bankman-Fried's ex Caroline Ellison blamed him for FTX's collapse.

FTX Founder Sam Bankman-Fried Accused of Misusing Customer Funds

Prosecutors shared a key piece of evidence in the case against FTX founder Sam Bankman-Fried. An employee recorded Caroline Ellison blaming him for using customer funds, per a new filing. Bankman-Fried was remanded to prison in New York last week for leaking Ellison’s diary entries.

Federal prosecutors have revealed new evidence in the case against Sam Bankman-Fried, the founder of cryptocurrency platform FTX. In a court filing, prosecutors shared a recording made by an employee of Alameda Research, the hedge fund helmed by Caroline Ellison, a former affiliate and ex of Bankman-Fried. In the recording, Ellison directly blames Bankman-Fried for using customer money as FTX faced financial troubles.

The recording, which took place during an all-hands meeting, captures Ellison informing Alameda employees about the impending bankruptcy of FTX. Prosecutors argue that this recording adds to the mounting evidence that Bankman-Fried played a significant role in decision-making at Alameda Research. In the meeting, when asked who decided to use FTX customer deposits, Ellison points to Bankman-Fried.

Ellison’s role in the case is crucial, as she has already pleaded guilty to charges of wire fraud and money laundering. Prosecutors believe she will be a key witness at the trial, providing insights into the events leading up to FTX’s decline and Bankman-Fried’s alleged attempts to maintain his image.

Additionally, prosecutors plan to present a memo authored by Ellison entitled “Things Sam Is Freaking Out About,” further substantiating the claim that she acted on Bankman-Fried’s behalf. This memo not only details negative press surrounding Alameda and FTX but also contains Ellison’s reflections on the alleged scheme between the two entities.

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Bankman-Fried’s attorney has yet to provide a comment on the latest developments in the case. In January, Bankman-Fried was charged with illegally diverting funds from FTX customers to Alameda. He has pleaded not guilty to eight criminal charges, including securities fraud and money laundering.

While Bankman-Fried initially faced house arrest with a $250 million bail, he was recently remanded to a New York prison known for its poor conditions. This decision stemmed from Bankman-Fried’s alleged act of leaking Ellison’s diary entries, which prosecutors argue constituted witness tampering.

The trial against Bankman-Fried is scheduled to begin on October 2. Ellison and other colleagues from Alameda will provide crucial testimony about the events leading to FTX’s downfall and Bankman-Fried’s alleged fraudulent activities.

This case sheds light on the intricate world of cryptocurrency and its potential for abuse. As digital currencies continue to gain prominence in the financial landscape, it is essential to ensure trust and accountability within the industry. The trial of Sam Bankman-Fried will serve as a pivotal moment in determining the legal boundaries and consequences for those involved in fraudulent practices.

Overall, this situation highlights the importance of transparency, ethical conduct, and regulatory oversight in the ever-evolving world of finance. It serves as a reminder that even in cutting-edge industries, traditional principles of integrity cannot be overlooked.

• ftx
• Sam Bankman-Fried