How Sam Bankman-Fried’s ex-girlfriend and early recruit helped put the FTX founder behind bars for 25 years
Caroline Ellison, former chief executive officer of Alameda Research LLC, center, arrives at court in New York, US, on Tuesday, Oct. 10, 2023.
Yuki Iwamura | Bloomberg | Getty Images
In sentencing FTX founder Sam Bankman-Fried to a 25-year prison sentence on Thursday, Judge Lewis Kaplan cited testimony from Caroline Ellison, an ex-girlfriend of the defendant and early recruit into his crypto enterprise.
“I keep coming back to Ms. Ellison’s testimony that he knew it was wrong,” Kaplan said at the sentencing hearing in downtown Manhattan. “He knew it was criminal.”
Ellison was the star witness for the Department of Justice in its prosecution of Bankman-Fried. She agreed to a plea deal in December 2022, a month after FTX spiraled into bankruptcy.
As part of her testimony at the criminal trial late last year, Ellison supplied the government and the jury with text messages, documents and secret recordings that ultimately helped lead to Bankman-Fried’s conviction on all seven charges against him.
Manhattan U.S. Attorney Damian Williams said in a statement after the sentencing on Thursday that Bankman-Fried’s “deliberate and ongoing lies demonstrated a brazen disregard for his customers’ expectations and disrespect for the rule of law, all so that he could secretly use his customers’ money to expand his own power and influence.”
Ellison, who ran FTX’s sister hedge fund Alameda Research, pleaded guilty to two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering.
Though Ellison faces similar sentencing guidelines to Bankman-Fried, she’s expected to receive a far more lenient sentence due to her role as a cooperating witness.
Caroline Ellison is questioned as Sam Bankman-Fried watches during his fraud trial before U.S. District Judge Lewis Kaplan over the collapse of FTX, the bankrupt cryptocurrency exchange, at Federal Court in New York City, October 11, 2023 in this courtroom sketch.
Jane Rosenberg | Reuters
Ellison’s complicated ties to SBF
Ellison jumped into Bankman-Fried’s crypto orbit in 2017.
She’d been working as a trader at Jane Street, where Bankman-Fried got his start in finance. Bankman-Fried had reportedly convinced the Stanford graduate to ditch her Wall Street gig and join Alameda, when the hedge fund was still in its original Bay Area office.
Ellison spent years as Bankman-Fried’s on-again, off-again girlfriend and, at times, his roommate. She followed Bankman-Fried from California to Hong Kong and ultimately to the Bahamas, as Bankman-Fried repeatedly shifted headquarters for his crypto companies.
Michael Lewis wrote about Ellison in his book, “Going Infinite,” which covered Bankman-Fried’s rise and fall. In 2021, Ellison was promoted to CEO of Alameda, a job for which, according to Lewis’s reporting, neither Ellison nor Bankman-Fried found her particularly well suited.
“Caroline sensed that, even as Sam promoted her to CEO of Alameda Research, he disapproved of her job performance — and she shared his opinion,” Lewis wrote.
Lewis shared an excerpt from one of the memos that Ellison had sent Bankman-Fried. “It feels like I’m doing a much worse job managing Alameda than you would if you were working on it full-time,” she wrote.
In April 2021, Ellison tweeted about “regular amphetamine use” in a thread that also talked about the “herculean” effort it took for her to get off of her couch and go for a hike.
Court filings show that Ellison’s compensation paled in comparison to other top executives. Of the $3.2 billion in payouts to the exchange’s founders and other senior employees, FTX’s head of engineering, Nishad Singh, received $587 million, co-founder Gary Wang got $246 million and $2.2 billion went to Bankman-Fried. Ellison received $6 million.
Some of Ellison’s private diary entries were leaked by Bankman-Fried to The New York Times, which published a report about them last July, months before the trial. The act ultimately landed Bankman-Fried back in jail after Kaplan revoked his bail for alleged witness tampering.
In a Google document from February 2022 shared with the Times, Ellison wrote, “I have been feeling pretty unhappy and overwhelmed with my job. … 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.”
She added, “It doesn’t really feel like there’s an end in sight.”
‘Trying to fix problems’
But it was in the courtroom that jurors got to hear Ellison for the first time.
U.S. Attorney Thane Rehn said during the trial that Bankman-Fried “was using her as a front” when “in reality, he was still calling the shots at Alameda.” Over the course of her multi-day testimony, Ellison helped prosecutors build a narrative that she was acting at the direction of Bankman-Fried in helping him steal customer money from FTX and using it to help prop up Alameda, which was suffering in the wake of the crypto winter.
Ellison said Bankman-Fried was still CEO of Alameda when the funneling of money began. She said she was under the impression that it was FTX customer money because the sums exceeded the exchange’s profits and the amount of capital it had raised.
In mid-2021, when FTX bought equity in the company back from rival exchange and early investor Binance, FTX used $1 billion in customer funds for the transaction, Ellison testified.
Ellison said she considered resigning from Alameda at various points from 2019 to November 2022.
On one of her Google Docs, Ellison had a section entitled “limiting factors in scaling,” which she said referred to things that were holding back Alameda. The first thing she listed was management, including a comment on her former co-CEO Sam Trabucco.
“I feel like neither Trabucco nor I has been doing a great job of pushing on stuff,” she wrote. “We’re in the mode of maintaining status quo and trying to fix problems.”
In terms of the commingling of operations between FTX and Alameda, Ellison admitted on the witness stand that the two firms didn’t have a proper “Chinese wall” separating the businesses.
During her testimony, Ellison mostly avoided eye contact with Bankman-Fried, staring down at her hands between questions and frequently flipping her hair over her left shoulder. Bankman-Fried also often looked away, with hands clenched.
Ellison told the jury that her breakup with Bankman-Fried in the spring of 2022 affected communications between the two of them. They would talk mostly over Signal despite living in the same apartment, and they largely avoided each other outside of work.
Danielle Sassoon, the assistant U.S. attorney representing the government, told Kaplan several times “the defendant has laughed, visibly shaken his head, and scoffed,” which she said could be having an effect on Ellison “given the history of this relationship, the prior attempts to intimidate her, the power dynamic, their romantic relationship.”
Caroline Ellison, former chief executive officer of Alameda Research LLC, arrives to court in New York, US, on Thursday, Oct. 12, 2023.
Bloomberg | Bloomberg | Getty Images
Secret recordings and texts
Of the hundreds of items entered into evidence during the trial, a bank of messages on encrypted app Signal was among the most calamitous for Bankman-Fried.
The government presented a series of Signal exchanges involving Bankman-Fried, Ellison, Wang and other top execs. In one such exchange, from Nov. 8, 2022, Ellison appealed to Bankman-Fried and other members of the inner circle, asking for help on optics and public messaging.
Prosecutors relied heavily on text messages sent among FTX and Alameda Research executives in the case against Sam Bankman-Fried.
Source: SDNY
She wrote, “multiple people internally asking me whether they should continue to make statements to external parties like ‘Alameda is solvent.’ should i suggest they stall instead? just stall on responding to their messages? or what?”
That day, FTX issued a pause on all customer withdrawals.
The following day, Ellison again looked to the group for guidance about how to handle an all-hands meeting for Alameda’s roughly 30 employees.
Ellison’s proposal was to tell them, “Alameda is probably going to wind down” and that there was “no pressure” to stay but help with “stuff like making sure our lenders get paid” would be “super appreciated.”
Bankman-Fried suggested she say something about there “being a future of some sort for those who are excited.”
Prosecutors relied heavily on text messages sent among FTX and Alameda Research executives in the case against Sam Bankman-Fried.
Source: SDNY
Ellison ended up divulging a lot more than that in the staff meeting, a secret recording of which was played for the jury.
“Alameda borrowed a bunch of money,” which it used to make investments, Ellison said at the meeting. But as crypto prices fell, “FTX had a shortfall of user funds” and then “users started withdrawing their funds” and they “realized they would not be able to continue.”
When she was asked by a staffer whose idea it was to plug Alameda’s loan losses with FTX customer money, she said, “Um, Sam, I guess,” and giggled.
“FTX basically always allowed Alameda to, like, borrow user funds, as far as I know,” Ellison said.
![The new Momentum Cito E+ dares you to leave the car at home [Video]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2024/04/momentum-cito-e.jpg?resize=1200,628&quality=82&strip=all&ssl=1)
All the cool suburbanites are already taking their kids to school, loading up at the farmers’ market, and making deliveries on clever and capable cargo e-bikes, but the new Momentum Cito E+ from Giant raises the cargo bike bar even higher — and makes leaving the car at home easier than ever.
Momentum is a new brand of “lifestyle” e-bikes from Giant Group designed to deliver premium features to customers while still hitting that $3,000-4,000 market “sweet spot.” Their latest bike, the all-new for 2024 Cito E+ utility bike, does just that, coming to market with a premium battery, Bluetooth technology, a suite of high-end safety features, and a $3,200 starting price.
Premium battery
Getting the most out of your e-bike often means getting the most out of your battery — and Momentum absolutely gets that. The Cito E+ ships with a 780 Watt-hour Panasonic battery pack with 22700 cells that have been optimized for e-bike use.
Compared to other ebike batteries with similar power ratings, the Momentum’s Panasonic battery promises to be lighter and more durable, with superior IPX7 weather protection, thermal regulation, and other safety features built-in (in fact, Panasonic was the first e-bike supplier to score a UL safety rating for its batteries).
The battery is easily removable for charging at home or in an office, but it can be charged while it’s in the bike, too. Either way, charging won’t take long — from 0 to 80% of charge (approx. 60 miles) of range is available in 3.5 hours, while a full (75 mile) charge takes less than 5 hours.
Connected cargo bike
As our test rider highlights in the video (above), the Momentum Cito E+ uses a proprietary battery management system, or BMS, to monitor the battery pack for maximum efficiency and reliability down to the individual cell level.
The BMS uses Bluetooth connectivity to transfer battery health data, state of charge, and other important information straight to the RideControl app, which enables the bike’s owner to get an in-depth look at the overall state of their e-bike and provides valuable diagnostic data to both the technicians tasked with servicing the bike and Giant themselves, to help develop even better e-bikes in the future.
That connection to Giant Group is a huge potential benefit to Momentum Cito E+ buyers, by the way, as it gives them access to support from more than 1,200 brick and mortar Giant dealers across the US alone (above).
That’s a serious advantage that online-only bike brands simply can’t match.
Safety first … and maybe second, too
Momentum’s commitment to safety doesn’t stop at the battery. The Cito E+ features confidence-inspiring 4 piston hydraulic disc brakes and a heavy duty suspension for predictable handling even under heavy loads — important if you have to suddenly haul the bike down from its electronically assisted 28 mph top speed with precious kids and cargo on the back.
LED head and taillights with a lever-activated taillight ensure Cito E+ riders will be seen, too, helping you stay safer after hours.
Accessories and add-ons
Momentum’s Cito E+ offers a comprehensive selection of accessories to help optimize it for each rider’s unique use case — whether that’s hauling up to 132 lbs. of cargo on the rear rack and 33 lbs. on the optional front basket (shown, above), or adding 2 Thule Yepp Maxi seats and getting the little ones to school five times a week.
You can find out more about the Momentum Cito E+ and the brand’s available accessories by clicking here.
Momentum Cito E+ gallery
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Environment
‘This is a unique time’: ARK Invest’s chief futurist tackles tech innovation from AI to robotics
ARK Invest’s chief futurist lists five groups that should give tech investors an edge.
According to Brett Winton, robotics, artificial intelligence, multi-omics sequencing, public blockchain and energy storage are key areas because they’re all entering the marketplace at the same time.
“We believe that this is a unique time in technological economic history,” he told CNBC’s “ETF Edge” this week.
Winton collaborates with ARK Invest CEO Cathie Wood to maintain the ARK Venture Fund (ARKVX), which allows investors to buy into the private technology space.
According to the firm’s website, the goal of the fund is to make venture capital offerings of innovative spaces in the market accessible to individual investors. As of April 10, it shows the fund’s top holdings include Epic Games, known for online video game Fortnite, and biotech companies Freenome and Relation Therapeutics.
“Our emphasis is that we are investing in innovation over the long term and going to support management teams,” said Winton.
He contends it’s a strategy that’s often not prioritized.
“That’s a real challenge a lot of public market investors don’t have that long-term view,” Winton added.
The ARK Venture Fund is down more than 7% so far this year. However, it’s up almost 39% percent over the past 52-weeks.
FirstElement Fuels has opened the world’s first large-scale hydrogen fueling station for heavy-duty commercial trucks just outside the Port of Oakland.
FirstElement is calling their new filling station, which opened to the public this week for tours and demonstrations, the first of its kind. Located near the Port of Oakland, the company claims its hydrogen pumps can “fill” a truck’s hydrogen tanks in as little as ten minutes, which works out (in their math) to as many as 200 trucks per day.
As for customers, the company says there are 30 Hyundai Xcient semi trucks using the fueling station currently, as well as a number of Nikola hydrogen fuel-cell-powered trucks.
A ceremony to mark the station’s opening was held Tuesday, and was attended by state officials including Liane Randolph, chair of the California Air Resources Board (CARB) and Tyson Eckerle, clean transportation advisor for Gov. Gavin Newsom’s business development office. Primary funding for the Oakland station was provided by CARB and the California Energy Commission.
Eckerle notes that the US federal government is handing out $8 billion to jump-start what it calls the “hydrogen economy,” and expects sufficient funding to build up to 60 more hydrogen truck stations like this one in California – which would, theoretically, be enough to serve 5,000 trucks and 1,000 buses.
All well and good, but …
What if it’s already too late for hydrogen?
MAN Trucks CEO, Alexander Vlaskamp, said it best when he said that it was “impossible” for hydrogen to effectively compete with BEVs.
He’s right – on a level playing field, there is absolutely no reason to believe hydrogen has any kind of future. But we don’t operate on a level playing field, and comments like Eckerle’s, along with an $8 billion federal budget and a number of supposedly genuine industry experts touting its usefulness as a fuel, mean we have to take hydrogen seriously (at least, for now).
Even so, it seems like the tide of public opinion is already starting to turn against hydrogen. Outlets that may never have questioned a manufacturer’s claims about a hydrogen-fueled vehicle a few years ago now seem more than willing to call those claims out. Here’s just one example:
Producing hydrogen itself can be very dirty. Most hydrogen produced today requires methane, which is a fossil fuel and a strong greenhouse gas contributor. The industry is working on production alternatives, including carbon capture and storage from the burning of methane, or quitting methane altogether to make green hydrogen, using an electrolyzer to split water’s hydrogen and oxygen.
Both alternatives are prohibitively expensive without government subsidies.
RUSS MITCHELL, AOL/Los Angeles TIMES.
So far, it’s not clear that FirstElement’s claims about either the sustainability of its hydrogen or the practicality of its filling station will convince many battery electric absolutists.
Take the company’s hydrogen production process as an example. FirstElement says that its supplier, Air Liquide in Las Vegas, uses natural gas as “feedstock” for its hydrogen. It buys biogas to blend with natural gas in order to create hydrogen – and that, because the gas used is more than 60% renewable, the hydrogen qualifies as “green.”
FirstElement hydrogen production
Additionally, the claim of 10 minute fast fills should come with an asterisk or two. That’s because FirstGreen is using new “cryopump” technology from Bosch Rexroth to allow for filling at 900 bar (15,000 psi). While that seems like more enough to push 100 kg into a tank in about ten minutes, cryogenically cooling hydrogen is an energy intensive technology that requires a lot of electricity to function properly. Electricity that it says will come from the stored hydrogen.
In fairness, however, Bosch has some ideas here to help station owners maximize the usefulness of all that electricity.
“Cold is like gold,” says Dave Hull, regional vice-president, Bosch Rexroth. “You’ve got all this cold energy. All my career I worked to get rid of heat. You can take that energy and run a whole station’s refrigerators for Rock Star energy drinks, or air conditioning. Bosh has a whole division of heat pumps and building technologies.”
Whether or not that added efficiency adds up to actual energy and cost savings, rather than a lifeline for the gas industry and tier 1 auto suppliers like Bosch however, remains to be seen. Meanwhile, hydrogen costs continue to rise.
Platts last assessed California’s retail hydrogen price at $33.48/kg Jan. 4, 2023, which is the weighted average hydrogen price offered at retail fueling stations across the state. The price has risen 112% from when Platts began the assessment in September 2021, according to S&P Global Commodity Insights data.
Despite the high cost of hydrogen (“green” hydrogen is more expensive, still), Shane Stephens, one of FirstElement’s founders and its chief development officer, remains undeterred.
“We, at FirstElement Fuels, have a lot of confidence the market is coming,” says Stephens. “We see the regulations on the horizon, the OEMs and fleet owners are going to have to respond to that, especially when it comes to goods movement, and hydrogen and fuel cells are the best – if not only – solution that will work for many of those use cases.”
Electrek’s Take
As a light vehicle fuel – despite the efforts of Hyundai, Toyota, and (more recently) Honda – things aren’t going well for hydrogen. As a fuel for massive semi trucks and even bigger heavy equipment, however, it might stand a chance against current battery technology.
But battery tech isn’t stagnant, and lighter, better, faster charging battery news that used to come every year, and then every month, now seems to be coming every week – and I’d argue that you’d be foolish to assume batteries that are twice as energy dense at half the weight won’t be here well ahead of California’s 2035 ICE ban.
But that’s just me. You guys are smart. Head on down to the comments and let us know what you think.
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