Sam Bankman-Fried’s lawyer cross-examines Caroline Ellison

NEW YORK (AP) — Sam Bankman-Fried’s attorney did small to dent the believability of the government’s vital witness in the previous crypto mogul’s fraud trial Thursday, meandering by way of a cross-assessment of Caroline Ellison that at instances remaining even the choose puzzled and impatient.

Throughout the prior two times of testimony, the prosecution introduced Ellison as a higher-amount insider who experienced, at Bankman-Fried’s path, overseen the improper borrowing of funds from customers at the FTX crypto trade run by Bankman-Fried. The resources often were utilized for investments at an affiliated investing agency, Alameda Research, that was headed by Ellison, Bankman-Fried’s a person-time girlfriend.

Bankman-Fried’s direct defense lawyer, Mark Cohen, was predicted to try to shift the blame for the troubles at Alameda to Ellison, subsequent up on his opening assertion in the trial where by he stated Bankman-Fried didn’t commit fraud and as a substitute was attempting to thoroughly clean up a mess mostly developed by his lieutenants.

Cohen, even so, appeared to struggle in his questioning of Ellison, failing to knock any holes in her testimony. He consistently altered matters, adjusted dates of discussion, generally seemingly at random.

Numerous situations, Choose Lewis A. Kaplan experienced to ask Cohen the place he was going with his questions or what exactly he was chatting about.

Immediately after Ellison concluded testifying, prosecutors brought out a former program developer at Alameda who largely backed up what Ellison explained to the jury.

“I was totally shocked,” stated Christian Drappi, who labored for a year at the crypto investing firm and was existing when Ellison arrived thoroughly clean to Alameda personnel in November 2022 that the buying and selling business had been working with FTX customer cash. Exchanges like FTX are intended to segregate customers’ deposits from any bets they location in the marketplaces.

Ellison put in a great deal of her testimony on Tuesday and Wednesday going for walks the jury by way of how she frequently experienced to tap into the purchaser deposits at FTX to address challenges at the hedge fund or at the exchange. FTX deposits would be withdrawn to pay out for new investments or political donations, or to hide steep losses on Alameda’s equilibrium sheet, she testified. All of this was done at the course of Bankman-Fried, she said.

When the losses at Alameda became so major in November 2022, it grew to become necessary to shut down the investing company and provide FTX to possibly save the two entities from individual bankruptcy. Ellison held a all-fingers assembly that 7 days, which was recorded by an Alameda personnel and given to authorities investigators.

In people audio tapes played for the jury, Alameda employees questioned Ellison whether the conclusion to borrow FTX purchaser money was a “YOLO” determination, an acronym meaning “you only dwell at the time,” implying that it experienced been accomplished impulsively.

No, Ellison told staff, on individuals tapes. It was performed above a period of a long time.

Drappi testified he resigned 24 hours later after that assembly.

Ellison, 28, pleaded guilty to fraud rates in December, when Bankman-Fried was extradited to the United States from the Bahamas. Bankman-Fried, 31, has pleaded not guilty to fraud rates.

At first confined to his parents’ Palo Alto, California, home beneath terms of a $250 million bond, Bankman-Fried has been jailed due to the fact August immediately after Decide Kaplan concluded that he experienced tried out to improperly affect possible witnesses, including Ellison.


Reporter Larry Neumeister contributed to this write-up.

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