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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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EnviroSpark just got $50M, and it’s ready to hire Tesla Supercharger team talent

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EnviroSpark just got M, and it's ready to hire Tesla Supercharger team talent

Thanks to a new $50 million investment, Atlanta-based EV charging company EnviroSpark wants to hire as many of the Tesla Supercharger team as possible.

The $50 million investment from mid-market infrastructure equity investment firm Basalt Infrastructure Partners will allow EnviroSpark to rapidly grow its owned and operated network across the US, innovate technologies, and make its EV infrastructure more accessible and sustainable.

EnviroSpark wants to do that with laid-off talent from Tesla, specifically the Supercharger team, which was laid off just over a week ago. This pop-up is on its website’s homepage:

Aaron Luque, cofounder and CEO of EnviroSpark, said in an emailed statement:

This is the single greatest talent acquisition opportunity since I founded EnviroSpark. Tesla had been able to scale their charging infrastructure due in no small part to the talented employees on the Supercharger team.

With the help of our recent investment from Basalt, we’re looking to bring on as many of these highly skilled individuals as possible to achieve our ambitious growth objectives.

Following a successful $15 million funding round led by Ultra Capital in 2022, EnviroSpark has made a name for itself in the EV charging market. With more than 8,200 charging plugs all over North America, the company is in a great position to help accelerate EV adoption.

EnviroSpark has recently forged strategic partnerships with RaceTrac, Waffle House, IHG Hotels & Resorts, and Ford Dealerships. These collaborations complement longstanding relationships with Tesla, Volkswagen, Volta, and Starwood Capital Group.

It’s also partnered with the US federal government through the General Services Administration to advance commercial and government EV adoption and secured National Electric Vehicle Infrastructure (NEVI) awards in Georgia and Tennessee.

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I got a rare look behind the scenes at Ananda’s e-bike systems factory in China

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I got a rare look behind the scenes at Ananda's e-bike systems factory in China

I recently took a trip to China in order to see for myself how many of the e-bike drive systems and components we use daily in the West were originally designed and produced. And no journey to view the origins of the most popular e-bike components would be complete without a visit to Ananda, one of the largest and most advanced OEMs in the industry.

I was able to visit the company’s R&D headquarters in Shanghai as well as one of their factory locations in Wuxi, giving me a close look at the design process and how those designs get manufactured into real e-bike systems.

After starting operations in 2001, Ananda has focused purely on micromobility systems since 2011. They’ve long built many types of hub motors for e-bikes and scooters, but expanded into their own mid-drive electric bike motors in 2017. And the company’s scale has grown massively ever since.

You might not have heard of the company yet, largely because they rarely advertise which major e-bike brands use their motors, controllers, and other components. But to put things in perspective, they produced around 6.5 million electric motors last year. Most of their products are built for the massive domestic market, but around 600,000 were exported to Europe and North America, where they made their way onto e-bikes we know and love. Many of the biggest brands use their systems. There’s a good chance you’ve got an Ananda motor, controller, or other hardware in your garage right now and just don’t realize it.

The company is constantly growing and a new Vietnamese factory is currently in the works, but because the North American and European markets are booming for Ananda, the company is currently working on setting up a new European factory. Ananda also recently opened up its first North American service center in Los Angeles and is expanding its local US-based team.

Ananda is responsible for designing and producing just about every component used in an electric bicycle other than the batteries and BMS. However, they work with several battery manufacturers and provide testing to certify compatibility with their extensive drive system lineup.

Their core competency is in research and development, followed by production implementation. While some companies merely design components produced elsewhere and others operate factories to manufacture third-party designs, Ananda does it all in-house, focusing on a wide range of systems ranging from entry-level to premium components.

And while Ananda started as mainly a component maker, offering their own motors and controllers, they’ve since evolved into an entire system integrator. Now they supply many e-bike brands with an entire e-bike system, minus the battery.

That all-encompassing approach has necessitated a huge footprint, with the company touting over 1,000 employees and over 200 automated machines, 70 of which are just for automated coil winding.

Ananda is also one of the most mature mid-drive motor makers in the Chinese market, now developing several higher-power models for the North American market. And with an obvious understanding of what Americans want, they explained to me that all North American motors they develop are compatible with throttles. Talk about knowing your audience!

Touring Ananda’s R&D facility in Shanghai

My tour at Ananda started in the R&D center. There, the company has a team of engineers and designers working on every component of e-bike drive systems.

A major piece of that design and development process is ensuring that each component can withstand the rigors of daily use in the harsh environments that e-bikes and e-scooters experience everyday.

I walked through rows of machines operating every type of torture test you can imagine. I saw motors being heat-shocked with high and low temperatures. I saw tanks with motors undergoing humidity testing, alternating between humid and arid conditions. Rain machines were running to keep a constant spray of water on the components. Each machine looked like a progressively worse type of condition that I’d definitely avoid putting my own e-bike through.

There were robotic button pushers who simply pushed buttons on handlebar displays tens of thousands of times. Motors were shock-loaded to simulate sudden stops and hard braking during operation; Imagine a broomstick in the spokes situation that instantly grinds the motor to a halt.

Dozens of dynamometers were set up for long-term testing, performing months of testing on constantly running motors.

Entire e-bikes were installed in full-scale testing machines to simulate long-term testing of complete systems over tens of thousands of miles.

In other parts of the R&D center, banks of 3D printers whirred away, producing prototypes that may become entirely new drive systems. One such system currently in the works is an e-bike hub motor that includes a three-speed transmission inside the hub. It will essentially become the marriage of a hub motor and an internally geared hub, offering the best of both technologies.

Across the hall, old-school technology in the machine shop contrasts with the high-tech machines, offering no-less-critical machining capabilities for fabricating and modifying new designs.

Teams of bike mechanics install test systems on mule bikes while test riders put them through miles and miles of real-world riding verification.

I even got to have a go myself, donning a company helmet and testing out several of the new motors and drive systems that Ananda has produced. I tried an M100 mid-drive motor that felt like a perfect balance of power and comfort, as well as a more powerful 750W M6100 mid-drive motor that was a lot of fun but, frankly, probably more power than I truly needed most of the time. That model is destined for the US market and is likely to be popular among riders seeking powerful performance.

I even tested a moped-style hub motor system complete with cast wheels that I was sure included a torque sensor in the drive system due to how responsive the pedal assist was. Only afterward did I learn it was actually just a really nicely designed cadence sensor that they had managed to remove almost all the pedal lag from.

After testing the e-bikes, they showed me their new diagnostic tools, which include software designed to easily diagnose issues that could arise over a lifetime of use. Instead of having an unclear error, shops or companies can simply use the software to run checks on the bikes and find out exactly what could be causing a specific issue.

Ananda’s manufacturing facility in Wuxi

The second half of the day was spent at one of Ananda’s factories, where I saw their manufacturing firsthand.

The first step is the inspection and analysis of components from Ananda’s suppliers. Workers inspect these components down to the micron level, ensuring everything is manufactured to spec. Even a small deviation in a motor shell, for example, could result in extra motor noise and increased wear.

That level of precision inspection is what separates the truly high-quality manufacturers who understand the level of accuracy necessary for consistently performing and reliable products.

From there, we moved to the factory floor, where motors are manufactured. The first step is the winding of the motor cores, which involves spools of copper wire being intricately wound around the motor’s stators.

If you’ve ever seen the way electric motors were built in years past, and honestly still in some places, you’ve probably seen videos of women hunched over tables using their delicate fingers for hand-winding motors. But Ananda’s over 70 automated motor winding machines make that a thing of the past.

Now, motor cores are not only wound without human labor, but they’re also done so much more accurately and uniformly. The beauty of robots is that they never make mistakes or get tired and sloppy; they just wind up every single motor the exact same way each time.

Those wound motor cores are then inspected before heading on to the next step of assembly into motor casings. The assembly process is a combination of manual and automated tasks. High-precision jobs, such as placing the gears and building the internal transmissions, are done using robotic assembly machines.

These sub-assemblies are then passed onto the rest of the assembly line, where they are joined by hand with the motor cases. A laser engraver serializes each motor shell along the way, and then it heads to sound testing to ensure it powers up and operates as quietly as it should.

Some motors are assembled using automated machinery, ensuring precision placement of the motor gears and components.

Each finished motor is scanned into the database and then packaged up for shipment to an OEM that will build it into an e-bike, e-scooter, or e-moped. Years ago, e-bike motors were always shipped in foam packaging for protection. But Ananda has switched to much more environmentally responsible paperboard packaging, offering equal protection without using such harmful materials that are not able to biodegrade.

Interestingly, in another part of the factory, I saw many of the same torture testing machines that I had first seen in the R&D center back in Shanghai. As I quickly understood though, this was all part of the quality control process. The same way new designs get torture tested during development in Shanghai, the factory does the same extensive testing as part of spot inspections for each batch of components produced. The motors undergo similar loading and accelerated lifespan testing to ensure they are all performing as intended, and that there aren’t any deviations from one production batch to another.

The next stop was to see how controllers were made, and that involved getting suited up and heading into the company’s clean room facility. There, automated pick and place machines built up circuit boards that then passed through various soldering machines to produce the circuit boards. The process and outputs are all monitored using high-precision 3D optical imaging, allowing the workers to inspect each solder joint from many angles and ensure all the components are properly soldered to the board. Many of these components are too small to inspect with the naked eye, and so this type of imaging and analysis allows the company to ensure every tiny little leg and every minuscule drop of solder is not only correctly placed, but also properly soldered so it doesn’t shake loose 10,000 miles from now.

Next, conformal coating is applied to electronics, creating a waterproof barrier that prevents water vapor from corroding the metals and circuits.

Each of these steps is a small but critical part of the manufacturing process, ensuring that the components produced in Ananda’s factories perform their required functions not just at the start of a product’s life, but also for many years to come.

Rooftop solar array

The last stop of the tour was something I was surprised to see. Before I left the factory, I was led up to the roof where a large solar array gathered much of the energy used by the factory.

While it doesn’t cover 100% of the company’s energy usage, it does offset a large portion and helps to further promote the same message that the electric vehicles using Ananda’s components share: that how we generate and use energy has a major impact on our environment.

These types of steps go a long way to reducing our own harmful effects on the planet. Humans will always need to travel around their cities, and using two-wheeled electric vehicles is one of the most energy-efficient ways to do it. If companies can offset as much of the emissions generated from producing those vehicles, then all the better.

The takeaway

I’ve known of Ananda’s electric motors for years, and in fact built some of my first e-bikes with their motors over a decade ago. But I had no idea how large Ananda had grown and just how much of the entire e-bike system they now produce.

Far from just another e-bike motor manufacturer, Ananda is truly an entire system integrator. Producing everything from displays to controllers and every type of motor you can think of, Ananda has positioned itself as a leader in the micromobility space.

You don’t make 10 million motors a year and several million more controllers and other components without learning a thing or two about how important the quality and precision of those manufacturing processes truly are.

The company has obviously taken all of that learning to heart, developing a high-tech and highly automated design and manufacturing system that has grown into a massive operation.

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BP tells property owners left in the dark by Elon Musk firing Tesla charging team to call them

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BP tells property owners left in the dark by Elon Musk firing Tesla charging team to call them

BP pulse, the fossil fuel giant’s EV charging division, is asking property owners left in the dark by Elon Musk firing Tesla’s charging team to give them a call as it plans to scoop up some of the sites.

Last week, Elon Musk fired Tesla’s entire charging team to make a statement against the head of the team who was pushing back against layoffs.

We reported that the move resulted in Tesla backing out of leases on planned Supercharger stations and a lot of confusion amongst its partners in ongoing projects.

While this undoubtedly will result in Tesla’s slowing down its charging station deployment, it is an opportunity for other companies.

Sujay Sharma, chief executive officer of bp pulse Americas, said in an interview with Bloomberg that site owners that were working with Tesla before should come:

“If there are stranded real estate partners who are looking for someone to call, they should feel free to pick up the phone and call me or look me up on LinkedIn.”

BP is also looking to scoop former Tesla charging employees.

Last year, Tesla sold $100 million worth of white-label Supercharger hardware to BP.

Electrek’s Take

As I said on the podcast last week, the only not-too-bad outcome to Elon firing Tesla’s charging team is if the workers get quickly scooped up by other companies looking to heavily invest in charging electric vehicles.

Those employees can bring back some of their projects that Tesla dropped, but even then, it will undoubtedly slow down EV charging deployment, especially in North America. It could potentially come back up after all those employees are settled.

Tesla could also sell BP more Supercharger hardware – though Tinnuci’s team was in charge of that too.

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