Sam Bankman-Fried’s ex kept a diary about FTX implosion

On October 2 of this year, the largest crypto trial in the US will start, namely the one against Sam Bankman-Fried and the implosion of his trading platform FTX. Celebrities like Tom Brady and Gisele Bundchen will be called to testify and many former customers wonder if they will ever see their money back.

Politicians are also bound to make an appearance as FTX gave multimillion-dollar donations to both Democrats and Republicans.

In November 2022 FTX imploded, leaving a multi-billion dollar pit. Hundreds of thousands of Americans and many more international investors lost access to their customer accounts.

HongKong

The key witness against Sam Bankman-Fried is his ex-girlfriend Caroline Ellison, who was appointed CEO of Alameda (a trading company in Hong Kong) at the age of 27. Apparently Caroline kept a diary in FTX’s last year of existence. The New York Times published some excerpts from it this week, and they are quite controversial.

I have been feeling pretty unhappy and overwhelmed with my job, Caroline Ellison wrote in February 2022.

At the end of the day I can’t wait to go home and turn off my phone and have a drink and get away from it all.

Caroline and Sam had an on-again, off-again relationship in 2020 and 2021 until Sam had decided to end it at the beginning of 2022. He would manage FTX from the Bahamas, she would manage Alameda from Hong Kong. Sam traded crypto, Caroline traded stocks and futures.

Both companies filled each other’s gaps in their respective accounts and seemed to be doing very well in the eyes of investors. Until, of course, their respective gaps got too big and the whole house of cards collapsed.

“$6 million went to Ms. Ellison, compared with $587 million for Mr. Singh, FTX’s head of engineering, and $246 million for Mr. Wang, one of the founders. Mr. Bankman-Fried received $2.2 billion.” https://t.co/nZ8VeeknFg

— Margaret Anderson (@AndersmMander43) July 20, 2023

Ellison’s writings show how it became increasingly difficult for her to stay with Alemeda. Sam became ever more famous and his face was also increasingly used to promote FTX.

Staying put meant “having to be around you all the time, hearing people talk about how great you are all the time,” she wrote in April 2022.

Even though she was CEO, Caroline was paid far less than other top executives at FTX and Alameda, though it’s unclear if she was aware of this.

According to court documents, the founders and other key employees received some $3.2 billion in payments and loans. Of that total, only $6 million was paid out to Caroline Ellison, compared to $587 million for Nishad Singh, FTX’s chief engineering officer, and $246 million for Gary Wang, one of the founders. Sam Bankman-Fried compensated himself with $2.2 billion.

Modulo Capital

A few weeks before the FTX implosion, Alameda’s debts had grown too large and Sam Bankman-Fried decided to close the company. Through a financial construct, he had tried to channel another $400 million into a new investment company called Modulo Capital. Spicy detail is that he had planned for Modulo to be run by another female trader, one with whom he had also had a romance in the past.

And lastly, the infamous couple

SBF + Caroline Ellison

They met trading at Jane Street

Then orchestrated the biggest fraud in history

Crazy pic.twitter.com/WHEyHvjie1

— PitchDeckGuy (@BetterPitchGuy) July 19, 2023

Caroline Ellison was apparently furious when she heard the story.

When FTX imploded in November after a bank run that revealed an $8 billion hole, she wrote to SBF:

I just had an increasing dread of this day that was weighing on me. Now that it’s actually happening it just feels great to get it over with.

In December, Sam was arrested in the Bahamas and soon after, witnesses saw Caroline Ellison in New York, where she testified at the FBI against her former boss.

When she appeared in court for the first time in December, she said “truly sorry for committing fraud. I knew that it was wrong.”

rafapress / Depositphotos.com