- SBF is accused of engaging in high-risk trading practices and misappropriating client monies.
- Ellison is expected to testify in favor of the plaintiffs.
On Tuesday, October 10, Caroline Ellison, formerly of the hedge fund Alameda Research and an intermittent business associate of Sam Bankman Fried (SBF), is scheduled to testify against him in his impending fraud trial.
SBF is accused of engaging in high-risk trading practices and misappropriating client monies from FTX. After FTX co-founder and ex-CTO Gary Wang has finished testifying, Ellison will take the stand.
Wang entered a guilty plea to fraud charges in December. In his testimony on Friday, he said that SBF had ordered him to create code that would allow Alameda to secretly withdraw $8 billion from FTX clients’ accounts. According to Wang, SBF wanted to give Alameda at FTX additional privileges such as the opportunity to have a negative balance and to avoid liquidation. Wang had faith in SBF’s judgment, therefore he did what he was told.
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According to Wang’s testimony, SBF told Alameda to use FTX clients’ money to buy FTT, the native token of FTX. It’s important to note that FTT had no value beyond the exchange. Wang claims that Bankman-Fried sought to artificially increase demand for FTT in order to drive up its price and increase its market share.
Ellison is expected to testify in favor of the plaintiffs. Her testimony is expected to offer light on the link between SBF, FTX, and Alameda Research. She will likely also reveal a number of scandals and previously unknown events that occurred at Alameda Research when she was CEO.
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