NEW YORK — Disgraced crypto wunderkind Sam Bankman-Fried was the mastermind behind a scheme to defraud FTX clients of billions of dollars, the star witness in his US trial testified on Tuesday (Oct 10).
Caroline Ellison, Bankman-Fried’s former business partner and girlfriend, said that they had stolen “around US$14 billion (S$19 billion)” from clients of the cryptocurrency trading platform before it collapsed into bankruptcy late last year.
The 31-year-old Bankman-Fried, co-founder and former CEO of FTX, has been charged with seven counts of fraud, embezzlement and criminal conspiracy, and if convicted could face a de facto life sentence of more than 100 years in prison.
In November 2022, the platform imploded, unable to cope with massive withdrawal requests from customers panicked to learn that some of FTX’s funds had been committed to risky operations by Alameda Research, Bankman-Fried’s personal hedge fund.
Ellison, a Stanford University mathematics graduate, was appointed by Bankman-Fried in 2021 to head Alameda, whose activities were largely financed by money from customers of FTX — without their knowledge.
She has pleaded guilty to fraud charges and agreed to cooperate with the prosecution as have two other close associates of Bankman-Fried.