Former Employee Testifies Against Crypto Trading Firm Co-Founder Sam Bankman-Fried in New York Court

A former employee of the now-defunct crypto trading firm FTX has testified against its co-founder, Sam Bankman-Fried, in a New York court. Caroline Ellison, who also dated and lived with Bankman-Fried, said that he had directed her to commit fraud by taking money from customers and using it to repay firms that had lent money to Alameda Research, the crypto trading firm she was leading.

Ellison pleaded guilty to wire fraud, securities fraud, money laundering and related conspiracy charges after FTX’s collapse last fall, and has been cooperating with prosecutors since then. She testified that Alameda had taken about $10 billion from customers who had put their money on the FTX exchange to trade digital currencies.

The trial is the first of its kind in the United States, as the government is attempting to hold Bankman-Fried accountable for the alleged fraud. The prosecution is relying heavily on Ellison’s testimony, as she is the only witness to the alleged crimes.

Ellison’s testimony is also significant because it is the first time that Bankman-Fried has been publicly accused of directing the fraud. Bankman-Fried has denied any wrongdoing, and his lawyers have argued that the government’s case is based on circumstantial evidence.

The trial is expected to continue for several more weeks, and the outcome could have far-reaching implications for the crypto industry. If Bankman-Fried is found guilty, it could set a precedent for holding crypto executives accountable for their actions.