Caroline Ellison Admits Alameda Research Maintains 7 Alternative Balance Sheets

Caroline Ellison, the former CEO of Alameda Research, a subsidiary firm of the defunct FTX exchange has admitted to providing seven different balance sheets.

Ellison’s New Testimony

Ellison’s testimony, delivered on the sixth day of Sam Bankman-Fried’s trial, exposed a web of deceit surrounding Alameda Research’s financials. She claimed that Bankman-Fried had instructed her to create “alternative” balance sheets, designed to mislead Genesis lenders about Alameda’s use of funds from FTX Derivatives Exchange. 

Ellison testified that she provided seven different spreadsheets, one of which was presented to Genesis. Notably, the spreadsheet failed to disclose that Alameda had borrowed a staggering $10 billion from FTX.

During her testimony, Ellison recounted her conversation with SBF, stating, “Sam said, ‘Don’t send 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.” This revelation suggests a deliberate effort to conceal significant financial dealings from key stakeholders.

In a revealing moment, Ellison expressed her concerns about potential customer withdrawals from FTX and the harm that could come from the truth being exposed. She admitted to feeling uncomfortable about her actions when questioned by the prosecution, stating that they were “dishonest” and “wrong.”

Caroline Ellison Plays the Blame Game

Throughout the trial, Ellison has largely placed the blame for the events surrounding the collapse of FTX on Sam Bankman-Fried. She alleges that Bankman-Fried directed the misuse of customer funds, while the defense seeks to portray her as the instigator. The trial’s outcome may hinge on the jury’s perception of where ultimate responsibility lies.

Ellison is deemed the key witness for the prosecution in Bankaman-Fried’s trial, following the testimony of FTX co-founder and former CTO Gary Wang. The trial has also named former FTX engineering director Nishad Singh as a potential witness, part of an agreement with the United States Justice Department.

Meanwhile, prosecutors indicated that they expect to rest their case on October 26 or October 27, at which point the defense will begin calling witnesses. Bankman-Fried has pleaded not guilty to seven criminal counts related to fraud at FTX and faces an additional five charges to be addressed in a March 2024 trial.