US v. SBF: Caroline Ellison says SBF asked her to make false balance sheets to hide debt, he considered offering FTX shares to the Saudi crown prince, and more
Caroline testified that SBF ordered her to use FTX customer funds to cover up for Alameda's losses — and to lie to lenders about it. She was in a “constant state of dread” about the looming liquidity crisis if FTX customers tried to withdraw. … Teddy Schleifer / @tschleifer : Caroline Ellison testified that FTX paid a $150 MILLION bribe to the Chinese government to try and unlock some frozen accounts. But SBF didn't want her to put things like that in writing. So they just called it “The Thing.” X: Adi / @aditya_baradwaj : PART 3: THE HACKS or How poor security practices at Alameda Research caused the company to lose hundreds of millions of dollars (1/n) 🧵 #SBF #FTX [image] Adi / @aditya_baradwaj : Incident #1: An Alameda trader got phished while trying to complete a DeFi transaction by accidentally clicking a fake link that had been promoted to the top of Google Search results Cost: $100M+ Postmortem: Implemented extra checks on our internal wallet software David Z. Morris / @davidzmorris : Huge day in court, one highlight: Caroline testified that when she first started work at Alameda, both she and Sam had “luxury cars” paid for by Alameda. Sam later had them swapped for a ToyotaCorolla and a HondaCivic, explicitly to create an image of modest living. #FTX @innercitypress : AUSA: What did the defendant tell you to do? Ellison: He told me to come up with alternative ways to present the information. He wanted me to conceal things on our balance sheet. So I prepared 7 different balance sheets. I did not want to be dishonest but... Adam Cochran / @adamscochran : So we still don't know what happened to the bulk of their money because $400M to repay Genesis doesn't account for the $10B theft from FTX or the tens of billions they lost prior, but $5B in stolen funds were “lent” to FTX execs... Mohammad / @abu9ala7 : Yes they stole money Yes they defrauded their investors Yes they lied to their customers Yes they had drug-fueled ogre packed orgies Yes they tried scamming new investors even after they knew it was Joever Yes they caused people to take their own life NO YOU CANNOT RIDICULE THEM Adam Cochran / @adamscochran : 1/2 The math in the FTX case still isn't adding up. -Alameda lost unknown $XX Billion on (?) -Then Alameda stole at least $15B+ from FTX -$5B was for Alameda executives purchases/investments. -$10B was to pay back lenders. -Only lender we heard paid back was $500m to Genesis. @autismcapital : Caroline Ellison of FTX admits that Sam bribed Chinese officials with $100M to unfreeze their assets, purposely tried to scam Saudi investors in the final days of FTX, intentionally tried to sic regulators on Binance to destroy his competition, and it's only lunchtime. @autismcapital : Sam Bankman-Fried was warned by one of his employees, Handi (whose dad was CCP), with regards to bribing Chinese officials and his response was to stone cold stare her down and say “shut the **** up.” Then after she left the company they laughed about her in a Signal chat saying... [image] @autismcapital : It's fascinating learning how self-aware Sam Bankman-Fried was. Caroline Ellison testifies that Sam knew exactly what he was doing with his disheveled nerd ugly image, he was cultivating the image of eccentric founder intentionally to raise money and get customers. It was a ruse. Joe Weisenthal / @thestalwart : It still blows my mind that this was just a year ago this was happening. Feels like it could be two or three by now Josh Russell / @jruss_jruss : Bankman-Fried considered borrowing money from Crown Prince of Saudi Arabia Mohammed bin Salman to bail out the billions of dollars Alameda took from FTX customer deposits, Ellison testifies. Josh Russell / @jruss_jruss : Day 5 of Sam Bankman-Fried criminal fraud trial continues Wednesday morning with direct testimony from former Alameda Research CEO Caroline Ellison. SBF's “utilitarian” justifications for accruing wealth “made me more willing to do things like lie or steal over time,” she said. [image] @deitaone : 🔸 Sam Bankman-Fried said he was a utilitarian who wasn't bothered by lying or stealing so long as what he did created the greatest good for the greatest number of people, Caroline Ellison testified. Ellison said that the longer she worked at Alameda with Bankman-Fried, the... Rachel Scharf / @rscharf_ : Ellison says Bankman-Fried “didn't think rules like 'don't lie' or 'don't steal' fit into” his utilitarian moral framework of creating the most good for the most people. “It made me more willing to lie or steal... Over time it became something I was more comfortable with.” Rachel Scharf / @rscharf_ : When Genesis asked to see Alameda's balance sheet, SBF directed CE to conceal both the $10B in FTX customer borrows and $4.5B loans to him and other execs. She moved these amts to long-term loans and offsets to make Alameda look less risky and conceal the customer theft, CE says Rachel Scharf / @rscharf_ : Ellison calculated in June 2022 that Alameda had already borrowed $10B of the roughly $16B in customer deposits on FTX and there was a solid chance they'd be unable to meet customer withdrawals. But she took billions more to repay lenders, Ellison says, “because Sam told me to.” Tuur Demeester / @tuurdemeester : Caroline: “[Sam] said that FTX would be a good source of capital, and he set up the system that allowed Alameda to borrow from FTX.” This is the fraud that's inherent in fractional reserve banking: accessing your customer's funds without their knowledge. Patrick McKenzie / @patio11 : As many cognoscenti have noted, that makes Alameda short about, oh, $20 billion on the Tethers that they supposedly purchased with cash at near par. Did those purchases happen? Were they settled in cash, or in crypto, or... on credit? At what discount? ...Surely not fifty cents? Rachel Scharf / @rscharf_ : Ellison says they used the term veiled term “FTX borrows” on spreadsheets for customer funds loaned to Alameda because SBF didn't want to put in writing what they were actually doing. This is a solid point in the govt's column as they work towards proving criminal intent... Alice / @alice_comfy : Per Caroline's testimony the FTT / Samcoins idea was all Sam. There's no way to hedge such a thing (other than directly). It's like Bill Hwang trying to hedge stocks manipulated by his excessive buying, the α comes from Alameda. I think one of the ways they lost much of the money that will come out is in holding up the prices of SRM & friends. They sold SRM tokens to the public at $1 and to VCs at $0.01, I believe this also occurred for some of the other tokens. Given there was very little interest & Alameda wanted the launch to appear successful (to eventually lure retail interest), they probably ran them up similar to how they defended $1 on FTT. It's another version of the ponzi scheme dynamic Sam had with the creditors. “If we show the VCs good returns they'll invest again”. @asvanevik : Alameda literally had an infinite money cheat code and still lost. [image] Max Chafkin / @chafkin : Ellison's testimony so far seems to severely undercut the claim by SBF (treated credulously in the Lewis book) that SBF had no idea what was going on. She's describing him closely managing the flow of information out of Alameda with an eye to hiding the truth @bennetttomlin : Gary Wang: “Sam mentioned the possibility of selling short some S&P 500 futures, and then a few days after that, the price of a bunch of cryptocurrencies fell, and then after that, Sam sent a bunch more messages being angry at Alameda for not doing that.” Remus / @remusofmars : Some fun takeaways from this: -Trading at Alameda was normally not going well (as its been getting better seems so exciting) -They helped make STEPN scam become so big (remember when people thought this was a great use case lmeow) -They took the easiest trade of all time just... Adam Cochran / @adamscochran : Other than the obvious crimes, the worst part of the Alameda saga is the arrogant threads they all wrote, arguing about their great trading insights while being down like infinite money... @zoeclaire_ : caroline ellison's testimony is SUPER clear lol, SBF is fucked @innercitypress : AUSA: Please read this. What is a USD return? Ellison: Return of our US Dollar loans, to this crypto currency address. AUSA: What is an OT loans? Ellison: An open term loan. Genesis wanted $400 million back. I was very stressed out. We would have to take from FTX @innercitypress : AUSA: How much USD had customers deposits vs how much was available to them on FTX? Ellison: They had deposited $13 billion, but only $3 billion were available to them on FTX. AUSA: What happened to the other $10 billion? Ellison: It had been borrowed by Alameda Yueqi Yang / @yueqi_yang : Caroline Ellison testified, in June 2022, she prepared seven versions of Alameda balance sheet and ultimately shared “Alternative 7” to lender Genesis, as directed by SBF The version hid the figure Alameda owed to FTX https://www.bloomberg.com/... @crypto @emilyjnicolle @innercitypress : AUSA: If FTX customers all tried to withdraw, what would happen? Ellison: We did not have the money. AUSA: Which of the 7 did Sam choose? Ellison: Alternative 7 with no disclosure of the $9.9 billion owed to FTX customers. @deitaone : 🔸 Caroline Ellison said she was careful to not explicitly write Alameda Research was borrowing FTX customer funds in worksheets. Sam Bankman-Fried instructed her to be discreet in case of legal troubles, she testified. “Sam always directed us to be careful about what we put in... David Z. Morris / @davidzmorris : Listening to Caroline Ellison talk about how she created a fake balance sheet to Genesis Trading in June of 2022 is like learning the details of your own murder. (Genesis was a DCG company and its collapse led indirectly to my downsizing at CoinDesk.) #FTX @innercitypress : AUSA: What did you do? Ellison: Sam said don't sent the balance sheet to Genesis. We were borrowing $10 billion from FTX and we had $5 billion in loans to our own executives and affiliated entities. We thought Genesis might share the info @innercitypress : AUSA: What did the defendant tell you to do? Ellison: To continue repaying Alameda's loans. AUSA: How did you? Ellison: Taking money from FTX customer funds. LinkedIn: Stacy-Marie Ishmael : Caroline Ellison, former CEO of FTX-affiliated crypto hedge fund Alameda Research, took the stand in the Sam Bankman-Fried trial for a second day on Wednesday. … Forums: r/CryptoCurrency : Ex Alameda engineer details how Alameda lost a total of $200 million in at least 3 separate incidents including phishing, seed phrase leak, and being rugpulled.
Bloomberg
Context & Ripple Effects
The testimony adds detail to a pattern already outlined by former FTX co-founder Gary Wang: Alameda's special access to FTX credit blurred the boundary between the exchange and its trading affiliate. Earlier reporting also traced Alameda's risk-taking to well before the broader crypto downturn, making the alleged concealment central rather than incidental.
The case is increasingly about governance inside a tightly connected leadership group, not solely a market collapse. Coverage of the trial's fractured inner circle underscores why firsthand accounts of internal instructions and records matter to the prosecution's narrative.
First-order effects
Ellison's account gives prosecutors direct testimony tying Bankman-Fried to alleged use of customer funds, lender-facing balance-sheet omissions, and concealed related-party loans.
The allegations put Alameda and FTX's internal financial records at the center of the trial, while sharpening scrutiny of the controls that permitted affiliate borrowing and opaque reporting.
Second-order effects
The testimony makes a defense based on incomplete awareness harder to separate from the operating structure described by witnesses; Bankman-Fried later said he understood only “pieces” of the companies' finances, including the balance-sheet shortfall.
For crypto exchanges and their lenders, the case reinforces the commercial importance of demonstrable segregation of customer assets, independent accounting, and limits on affiliated-market-maker credit.
Third-order effects
If this pattern becomes the reference case for enforcement and market practice, crypto intermediaries may face a more bank-like expectation that related-party exposure and customer-asset custody be auditable in real time.
The broader structural issue is whether exchange groups can retain integrated trading affiliates without governance safeguards strong enough to make preferential access and off-balance-sheet risk visible.
The trend: FTX's trial is becoming a defining example of the crypto legitimacy gap: opaque affiliate finance can turn exchange governance failures into customer-asset and market-trust failures.
More on this: In a Google Doc that SBF prepared in November 2022 (and submitted into evidence), SBF wrote: “The most likely sources of liquidity that we know of are Dustin Moskovitz” and others. The plan to rescue FTX that Sam formulated there included reaching out to Dustin.
One tidbit from today's Caroline Ellison testimony that will be very interesting to people in effective altruism: FTX and SBF saw Facebook co-founder Dustin Moskovitz, aka @moskov, as one of the likeliest people that could bail out FTX during that last fateful week in November.
Caroline Ellison testified that Sam Bankman-Fried ordered her to lie in mid 2022 to Genesis, one of FTX's lenders, about Alameda's balance sheet. Caroline prepared a bunch of bullshit balance-sheets that they could send, and Sam chose “Alternative 7” as the best lie of the bunch…
Few other highlights of Caroline Ellison's testimony this morning: — Caroline testified that SBF ordered her to use FTX customer funds to cover up for Alameda's losses — and to lie to lenders about it. She was in a “constant state of dread” about the looming liquidity crisis if …
Caroline Ellison testified that FTX paid a $150 MILLION bribe to the Chinese government to try and unlock some frozen accounts. But SBF didn't want her to put things like that in writing. So they just called it “The Thing.”
PART 3: THE HACKS or How poor security practices at Alameda Research caused the company to lose hundreds of millions of dollars (1/n) 🧵 #SBF #FTX [image]
Incident #1: An Alameda trader got phished while trying to complete a DeFi transaction by accidentally clicking a fake link that had been promoted to the top of Google Search results Cost: $100M+ Postmortem: Implemented extra checks on our internal wallet software
AUSA: What did the defendant tell you to do? Ellison: He told me to come up with alternative ways to present the information. He wanted me to conceal things on our balance sheet. So I prepared 7 different balance sheets. I did not want to be dishonest but...
So we still don't know what happened to the bulk of their money because $400M to repay Genesis doesn't account for the $10B theft from FTX or the tens of billions they lost prior, but $5B in stolen funds were “lent” to FTX execs...
Yes they stole money Yes they defrauded their investors Yes they lied to their customers Yes they had drug-fueled ogre packed orgies Yes they tried scamming new investors even after they knew it was Joever Yes they caused people to take their own life NO YOU CANNOT RIDICULE THEM
Caroline Ellison of FTX admits that Sam bribed Chinese officials with $100M to unfreeze their assets, purposely tried to scam Saudi investors in the final days of FTX, intentionally tried to sic regulators on Binance to destroy his competition, and it's only lunchtime.
Huge day in court, one highlight: Caroline testified that when she first started work at Alameda, both she and Sam had “luxury cars” paid for by Alameda. Sam later had them swapped for a Toyota Corolla and a Honda Civic, explicitly to create an image of modest living. #FTX
1/2 The math in the FTX case still isn't adding up. -Alameda lost unknown $XX Billion on (?) -Then Alameda stole at least $15B+ from FTX -$5B was for Alameda executives purchases/investments. -$10B was to pay back lenders. -Only lender we heard paid back was $500m to Genesis.
Sam Bankman-Fried was warned by one of his employees, Handi (whose dad was CCP), with regards to bribing Chinese officials and his response was to stone cold stare her down and say “shut the **** up.” Then after she left the company they laughed about her in a Signal chat saying.…
It's fascinating learning how self-aware Sam Bankman-Fried was. Caroline Ellison testifies that Sam knew exactly what he was doing with his disheveled nerd ugly image, he was cultivating the image of eccentric founder intentionally to raise money and get customers. It was a ruse.
Bankman-Fried considered borrowing money from Crown Prince of Saudi Arabia Mohammed bin Salman to bail out the billions of dollars Alameda took from FTX customer deposits, Ellison testifies.
Day 5 of Sam Bankman-Fried criminal fraud trial continues Wednesday morning with direct testimony from former Alameda Research CEO Caroline Ellison. SBF's “utilitarian” justifications for accruing wealth “made me more willing to do things like lie or steal over time,” she said. […
🔸 Sam Bankman-Fried said he was a utilitarian who wasn't bothered by lying or stealing so long as what he did created the greatest good for the greatest number of people, Caroline Ellison testified. Ellison said that the longer she worked at Alameda with Bankman-Fried, the...
Ellison says Bankman-Fried “didn't think rules like 'don't lie' or 'don't steal' fit into” his utilitarian moral framework of creating the most good for the most people. “It made me more willing to lie or steal... Over time it became something I was more comfortable with.”
When Genesis asked to see Alameda's balance sheet, SBF directed CE to conceal both the $10B in FTX customer borrows and $4.5B loans to him and other execs. She moved these amts to long-term loans and offsets to make Alameda look less risky and conceal the customer theft, CE says
Ellison calculated in June 2022 that Alameda had already borrowed $10B of the roughly $16B in customer deposits on FTX and there was a solid chance they'd be unable to meet customer withdrawals. But she took billions more to repay lenders, Ellison says, “because Sam told me to.”
Caroline: “[Sam] said that FTX would be a good source of capital, and he set up the system that allowed Alameda to borrow from FTX.” This is the fraud that's inherent in fractional reserve banking: accessing your customer's funds without their knowledge.
As many cognoscenti have noted, that makes Alameda short about, oh, $20 billion on the Tethers that they supposedly purchased with cash at near par. Did those purchases happen? Were they settled in cash, or in crypto, or... on credit? At what discount? ...Surely not fifty cents?
Ellison says they used the term veiled term “FTX borrows” on spreadsheets for customer funds loaned to Alameda because SBF didn't want to put in writing what they were actually doing. This is a solid point in the govt's column as they work towards proving criminal intent...
Per Caroline's testimony the FTT / Samcoins idea was all Sam. There's no way to hedge such a thing (other than directly). It's like Bill Hwang trying to hedge stocks manipulated by his excessive buying, the α comes from Alameda. I think one of the ways they lost much of the money…
Ellison's testimony so far seems to severely undercut the claim by SBF (treated credulously in the Lewis book) that SBF had no idea what was going on. She's describing him closely managing the flow of information out of Alameda with an eye to hiding the truth
Gary Wang: “Sam mentioned the possibility of selling short some S&P 500 futures, and then a few days after that, the price of a bunch of cryptocurrencies fell, and then after that, Sam sent a bunch more messages being angry at Alameda for not doing that.”
Some fun takeaways from this: -Trading at Alameda was normally not going well (as its been getting better seems so exciting) -They helped make STEPN scam become so big (remember when people thought this was a great use case lmeow) -They took the easiest trade of all time just...
Other than the obvious crimes, the worst part of the Alameda saga is the arrogant threads they all wrote, arguing about their great trading insights while being down like infinite money...
AUSA: Please read this. What is a USD return? Ellison: Return of our US Dollar loans, to this crypto currency address. AUSA: What is an OT loans? Ellison: An open term loan. Genesis wanted $400 million back. I was very stressed out. We would have to take from FTX
AUSA: How much USD had customers deposits vs how much was available to them on FTX? Ellison: They had deposited $13 billion, but only $3 billion were available to them on FTX. AUSA: What happened to the other $10 billion? Ellison: It had been borrowed by Alameda
Caroline Ellison testified, in June 2022, she prepared seven versions of Alameda balance sheet and ultimately shared “Alternative 7” to lender Genesis, as directed by SBF The version hid the figure Alameda owed to FTX https://www.bloomberg.com/... @crypto @emilyjnicolle
AUSA: If FTX customers all tried to withdraw, what would happen? Ellison: We did not have the money. AUSA: Which of the 7 did Sam choose? Ellison: Alternative 7 with no disclosure of the $9.9 billion owed to FTX customers.
🔸 Caroline Ellison said she was careful to not explicitly write Alameda Research was borrowing FTX customer funds in worksheets. Sam Bankman-Fried instructed her to be discreet in case of legal troubles, she testified. “Sam always directed us to be careful about what we put in...
Listening to Caroline Ellison talk about how she created a fake balance sheet to Genesis Trading in June of 2022 is like learning the details of your own murder. (Genesis was a DCG company and its collapse led indirectly to my downsizing at CoinDesk.) #FTX
AUSA: What did you do? Ellison: Sam said don't sent the balance sheet to Genesis. We were borrowing $10 billion from FTX and we had $5 billion in loans to our own executives and affiliated entities. We thought Genesis might share the info
AUSA: What did the defendant tell you to do? Ellison: To continue repaying Alameda's loans. AUSA: How did you? Ellison: Taking money from FTX customer funds.
Ex Alameda engineer details how Alameda lost a total of $200 million in at least 3 separate incidents including phishing, seed phrase leak, and being rugpulled.
AUSA: What does this say? Ellison: “Sam Bankman-Fried set the disappearing message time for 1 week.” AUSA: Did you speak in coded terms? Ellison: Yes. When we gave a large bribe to China - our accounts were frozen in a money laundering investigation.
Core memory unlocked. I was in court during SBF's trial when Caroline revealed FTX paid $150M for “the thing.” “The thing” being a bribe to Chinese officials to unfreeze accounts on other exchanges, after failing to siphon the $ through accounts set up by “Thai prostitutes” ❤️ [i…
Yes, Trabucco WAS co-CEO of Alameda at the time of the $100 million bribe to Chinese officials - he joked that staffer Handi's father - a Chinese government official presumably not on the take - might have turned them in. He left, and Caroline started tweeting...
Caroline Ellison testified that FTX paid a $150 MILLION bribe to the Chinese government to try and unlock some frozen accounts. But SBF didn't want her to put things like that in writing. So they just called it “The Thing.”
Alameda's Chinese bribe confession from Caroline Ellison Paid $100m bribe to withdraw the $1bn of funds stuck on OKX, Alameda used wallets of Thai prostitutes on the exchange unsure if bribe was to “CCP” or okex. bribe details were not uncovered as being out of scope 🦦
According to @innercitypress Sam Trabucco, co-CEO of Alameda, was named in court today as a co-conspirator with SBF in a $100M bribe to China for FTX. Despite not needing approval from Bermuda to press charges v. Trabucco, the DOJ has not. The DOJ and SEC are covering up Chinese.…