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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.

Sam Bankman-Fried's family on sentencing: We are heartbroken and will continue to fight for our son

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.

Sam Bankman-Fried faces up to 50 years in prison at sentencing hearing

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.

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FTX founder Sam Bankman-Fried sentenced to 25 years in prison for massive crypto fraud

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Toyota to launch a Prius-like bZ3C electric crossover, but you can’t have it

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Toyota to launch a Prius-like bZ3C electric crossover, but you can't have it

To keep up with surging BYD, Tesla, and other EV makers, Toyota is launching a new all-electric crossover. The Toyota bZ3C looks like the new Prius, but the electric SUV crossover won’t be available in the US.

Toyota to launch bZ3C in China as new BYD rival

“What kind of BEV would bring smiles to the faces of our Chinese Customers?” Executive Vice President and CTO Hiroki Nakakima asked during a press conference last month.

Toyota debuted its new bZ3C at the 2024 Beijing Auto Show in April as part of its “multi-pathway approach” to reduce emissions.

The bZ3C is designed as a fun, spacious EV around the concept of “reboot.” Toyota says the distinctive styled EV focuses on features to create a fun personal space for younger Gen Z buyers.

Toyota jointly developed the bZ3C with BYD Toyota EV Tech, FAW Toyota Motor, and Intelligent Electromobility R&D Center by Toyota.

BYD Toyota EV Tech, a joint venture between BYD and Toyota, has already launched the co-developed bZ3 electric sedan in China. However, the bZ3C appears to be a slightly bigger crossover SUV.

Toyota-bZ3C-EV
Toyota bZ3C electric crossover SUV (Source: Toyota)

The bZ3C was unveiled alongside the bZ3X, an all-electric “family-oriented” SUV. According to Toyota, the concept’s interior is based on a mobile “Cozy Home.”

Toyota-bZ3C-EV
Toyota bZ3C interior (Source: Toyota)

Both models will feature Toyota’s latest driver-assist systems and smart cockpits. Toyota is expected to begin selling both new EVs in China within the next year.

Prices and final specs will be revealed closer to launch. Check back soon for more info.

Electrek’s Take

After losing market share to BYD and other Chinese EV makers, Toyota is targeting younger buyers to compete in the region.

Toyota’s sales fell 3.1% in China in March due as “market competition continues intensifying.” Sales are down 1.6% through the first quarter as Toyota looks to rebound in the second half of 2024.

Although Toyota’s new bZ3C is designed for China, US customers also have something to look forward to.

Toyota is preparing another large electric SUV (in addition to the already announced three-row EV) as part of its recent $1.4 billion investment in its Princeton, Kentucky plant. It could be the electric Highlander we’ve been waiting for.

David Christ, GM of Toyota’s US division, told CarBuzz last month, “You’re going to see more BEVs from us in the future.” According to Christ, this will include an electric three-row Toyota Highlander.

Toyota is also considering electric Tacoma and Tundra models, but don’t get too excited. The company is monitoring the demand for rivals like the F-150 Lightning and Rivian R1T.

The company could use new electric models in the US, with its sole bZ4X accounting for less than 0.5% of sales through March. With the Lexus RZ included, total Toyota EV sales are still under 0.62%.

What do you think? Should Toyota launch its smaller electric crossover in the US? Let us know your thoughts below.

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XPeng rolls out AI-powered OS with 2K pure vision ADAS, CEO promises L4 autonomous driving by 2025

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XPeng rolls out AI-powered OS with 2K pure vision ADAS, CEO promises L4 autonomous driving by 2025

XPeng Motors is rolling out cutting-edge AI technology that it hopes will transform the automotive industry from “electrification to smartification.” The Chinese EV automaker held an AI Day event earlier today, detailing the impressive capabilities of XOS 5.1.0, “AI Tianji,” which it hailed as “the industry’s first AI-powered in-car OS.”

It’s been about a month since XPeng Motors ($XPEV) began touting its latest operating system’s (OS) capabilities during the Beijing Auto Show. XOS 5.1.0 focuses on artificial intelligence (AI) driven technologies to power smart vehicles and accelerate their evolution.

During the auto show, XPeng showcased a number of AI-centric technologies in the works that will offer its drivers an EV that can deliver more human-like decision-making and safer driving experiences via neural network learning and end-to-end data iteration from both vehicle and cloud processing.

XPeng also introduced plans to integrate and deploy what it calls the “industry’s first mass-produced 2K pure visual neural network large model in vehicles.” That news confirmed previous rumors that XPeng was abandoning LiDAR sensors in favor of pure vision, similar to Tesla FSD.

That being said, XPeng says its new system enables autonomous driving with capabilities comparable to LiDAR but uses pure vision to create a granular 3D naked-eye experience. We learned more about this technology and then some following XPeng’s AI Day event. Here’s a rundown.

  • XPeng AI
  • XPeng AI

XPeng rolls out exciting advanced tech during AI Day

There is much to unpack from XPeng’s AI Day in Beijing, China, earlier today when company founder, chairman, and CEO He Xiaopeng spoke to a live audience.

To begin, Xiaopeng outlined three core characteristics of this new breed of smart EV, led by AI large models in its OS: Active learning, rapid growth, and personalized experiences. The core of this technology involves the “feeding and training” of AI large models with unlimited rules to develop and grow their understanding, perception, and decision-making abilities in complex driving scenarios.

XPeng says it has already developed the necessary core algorithms for perception, positioning, planning, and decision-making while establishing vehicle-end and cloud-end data processing capabilities. As such, XPeng’s new AI-powered OS will enable rapid algorithm iteration based on actual data and offer future EV drivers enhanced autonomous driving capabilities that are continuously improving via over-the-air OTA updates.

A considerable part of XPeng’s OS and ADAS technology rolling out is enabled by “XNet,” the automaker’s new neural network. XNet is supported by XPeng’s planning and control large model, “XPlanner,” and a large language model called “XBrain.” Combined, XPeng says the integrated system enhances intelligent driving capabilities by 2x.

The XNet deep visual neural network used the industry’s first mass-produced pure vision 2K occupancy network to safely operate a given XPeng EV’s autonomous driving system with capabilities comparable to LiDAR. This new 2K pure vision network reconstructs the world with over 2 million grids to create 3D representations of drivable spaces and recognize every detail of static obstacles along a vehicle’s path.

XPeng shared that the perception range of pure vision 2K twice as long, covering an area equivalent to 1.8 football fields. Furthermore, the ADAS system can identify over 50 types of objects. With the autonomous driving system in place using AI and neural networks, XPeng has empowered the OS to learn and improve on its own using “XPlanner” and “XBrain.” Per the automaker:

XPlanner, like a human cerebellum, continually trains with vast amounts of data, making driving strategies increasingly human-like. This reduces driving jerks by 50%, improper stops by 40%, and passive human takeovers by 60%, providing an ‘experienced driver’-like smart driving experience that significantly enhances user comfort and safety.

With the introduction of the AI large language model architecture, XBrain, XPENG’s autonomous driving system gains human-like learning and comprehension capabilities, significantly improving its handling of complex and even unknown scenarios as well as its reasoning and understanding of real-world logics.

For example, with the support of XBrain, the autonomous driving system can recognize turn zones, tidal lanes, special lanes, and road sign text, as well as various behavioral commands such as stop and go, fast and slow. This enables it to make human-like driving decisions that balance safety and performance.

With the help of these new AI technologies, XPeng’s CEO told the crowd in China that the automaker will achieve Level 4 autonomous driving in the country by 2025. The automaker is also testing the end-to-end capabilities of its XNGP driver assistance technology globally.

Once we get the full English translation of XPeng’s AI Day event, we will be sure to add the video below. There’s much more to unpack, including the automaker’s AI assistant, Xiao P, Smart Cockpit capabilities, and safety features like AI Valet Driver, AI Parking, and AI Bodyguard. XOS 5.1.0, AI Tianji, is available to all eligible XPeng EV drivers beginning today.

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Exxon faces opposition from CalPERS after ‘devastating’ anti-ESG activist suit

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Exxon faces opposition from CalPERS after 'devastating' anti-ESG activist suit

ExxonMobil CEO Darren Woods speaks during the APEC CEO Summit at Moscone West on November 15, 2023 in San Francisco, California. 

Justin Sullivan | Getty Images

Exxon Mobil‘s months-long battle with two environmentally focused activist investors has cost the company the support of the California Public Employees Retirement System.

CalPERS, the $484 billion pension fund manager, said in a letter on Monday it would vote in opposition to all of Exxon’s 12 director nominees and its CEO Darren Woods at the shareholder meeting next week as a result of the company’s potentially “devastating” effort to quash the two activists, Arjuna Capital and Follow This. CalPERS has a $1 billion stake in Exxon.

The two activists submitted a shareholder proposal that would have forced the company to reduce direct emissions and set a target for lowering emissions at suppliers and customers. Exxon sued the investors in Texas federal court in January, prompting them to withdraw the proposal.

Even with the activists backing off, Exxon has continued its lawsuit to prevent the activists from ever again submitting such a proposal.

CalPERS said in its letter that Exxon’s “reckless” lawsuit threatened shareholder activism efforts on any issue.

“If ExxonMobil succeeds in silencing voices and upending the rules of shareholder democracy, what other subjects will the leaders of any company make off limits?” CalPERS CEO Marcie Frost and board president Theresa Taylor said in the letter. “Worker safety? Excessive executive compensation?”

CalPERS said it’s urging other shareholders to follow its lead “to send a message that our voices will not be silenced.”

Exxon could have potentially prevented the shareholder proposal from going public without a lawsuit by asking the SEC for an exclusion, which is a common practice. But Exxon went ahead with litigation, and said it’s seeking “clarity on a process that has become ripe for abuse.”

“We believe activists with minimal or even no shares should not be permitted to re-submit proposals that do not grow long-term shareholder value,” the company said in a post on its website.

Exxon has faced down activist investors in the past.

In 2021, Engine No.1 ran a campaign that landed the firm three board seats. Engine No. 1 had a 0.02% stake, compared to CalPERS’ current ownership of about 0.2%.

That campaign garnered support from a number of institutional investors, including CalPERS, in its effort to overhaul Exxon’s disclosure standards and reconsider the company’s place in a zero-carbon world.

CalPERS is now opposing those same three directors, Greg Goff, Kaisa Hietala and Andy Karsner, that it helped elect. Another activist investor, Inclusive Capital founder Jeff Ubben, is also on Exxon’s board.

“We hope ExxonMobil’s directors will reconsider the lawsuit, an effort that seems more suited to schoolyard bullying than corporate leadership,” CalPERS wrote in its letter.

WATCH: Activist Battle one year later

Activist Battle 1 Year Later

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