Sam Bankman-Fried spoke in code with his ex-girlfriend and business partner about potential illegal activity, the court heard today. 

Caroline Ellison was asked on the stand Wednesday if she recalled ever speaking in ‘coded terms about potential criminal activity’ with Bankman-Fried.

She said: ‘Yeah I do. When Alameda paid what I believe was a large bribe to Chinese government officials to get some of our exchange accounts unlocked.’

Ellison recalled writing ‘The Thing’ in a document describing the state of Alameda in 2021. 

She said she phrased it like that because she ‘didn’t want to put in writing what I thought were bribes.’

Caroline Ellison testified that she spoke in coded terms with Sam Bankman-Fried when Alameda paid a ‘large bribe to Chinese government officials’ 

Ellison broke down in tears as she apologized to anyone who lost their money as a result of the FTX fraud and said it left her feeling ‘indescribably bad’

According to Ellison, $1billion in Alameda’s assets were frozen, a figure that left Bankman-Fried ‘concerned’ and keen to find a solution

 Ellison said two crypto currency accounts that Alameda had in China were ‘frozen’ in 2021, meaning they couldn’t withdraw any money.

Alameda was told that it was part of a Chinese government investigation into money laundering by somebody else.

According to Ellison, $1billion in Alameda’s assets were frozen, a figure that left Bankman-Fried ‘concerned’ and keen to find a solution.

Ellison said that it took almost a year to unlock the money and that they first tried hiring a lawyer to negotiate with the Chinese government, but it didn’t work

They tried using trading strategies to get the money out including making several accounts that were controlled by Thai prostitutes but that didn’t work either.

Another employee suggested a different way – paying a Chinese official – but it led to pushback from a Chinese employee called Handi whose father was a Chinese government official.

Ellison said during one meeting she was ‘protesting a lot, a bad idea and it would get us in trouble’

She said: ‘At one point Handi was talking a lot and wouldn’t be quiet and let other people talk. Eventually he (Bankman-Fried) yelled at her to shut the f*** up’

To unlock the accounts, Bankman-Fried approved the transfer of $100 million to crypto wallets, the court heard. Ellison was asked who it was sent to but after an objection, she was not allowed to answer.

In a document describing the state of Alameda dated November 25, 2021, Ellison listed ‘notable / idiosyncratic stuff’ which included a $150 million debt for ‘The Thing.’

Ellison said she phrased it like that because she ‘didn’t want to put in writing what I thought were bribes’.

The following January Sam Trabucco, who at the time was Alameda’s co-chief executive, sent a message to Bankman-Fried which read: ‘Did Handi’s father immediately turn us in or something’.

Bankman-Fried responded: ‘Lol,’ meaning laugh out loud.

Ellison recalled writing ‘The Thing’ in a document describing the state of Alameda in 2021. She said she phrased it like that because she ‘didn’t want to put in writing what I thought were bribes’

Caroline Ellison took the stand again on Wednesday in ex-boyfriend Sam Bankman-Fried’s fraud trial

Ellison broke down in tears as she apologized to anyone who lost their money as a result of the FTX fraud and said it left her feeling ‘indescribably bad’.

The jury was shown a message she sent Bankman-Fried around November 7th last year as FTX was about to collapse.

She told him that if ‘things got a lot worse I don’t think I’m going to handle it well’.

Bankman-Fried gave her the bizarre response, saying that ‘s**** exciting’.

Ellison replied: ‘I think I just had an increasing dread of this day that was weighing on me for a long time and now that it’s actually happening it feels great to get it over with one way or another’.

Tearing up, she told the jury: ‘Overall it was the worst week of my life.

‘I had a lot of mood swings, a lot of different feelings. One of the feelings was an overwhelming feeling of relief.

‘This had been something I’d been dreading for so long, had been in my mind every day, I worried what would happen when the truth finally came out’.

Ellison said she felt ‘relief I didn’t have to lie any more’.

She said she was interested in ‘taking responsibility and being honest about what I’d done’.

She said: ‘I obviously felt indescribably bad about all the people that were harmed, the people that lost their money, people that lost their jobs’.

She was handed a box of tissues by a court clerk and used one to wipe her nose. 

Ellison was head of Alameda’s sister company FTX, which was allegedly used as a slush fund paid for by FTX customers’ money.

FTX, which was worth $32 billion at its peak, collapsed in November last year amid falling crypto prices and media reports raising questions about its finances.

Ellison, 28, the daughter of two MIT economics professors, has already pleaded guilty to her part in the fraud and is the prosecution’s star witness.

She testified that she got ‘very upset’ when Bankman-Fried said that the financial challenges were ‘my fault’.

Ellison described how in August 2022 she and Bankman-Fried had a difficult conversation in the study of his $30 million penthouse apartment in the Bahamas.

By that point it was clear that Alameda had borrowed more than $10 billion from FTX’s customers.

Ellison said Bankman-Fried told her she was ‘largely responsible for the financial situation at Alameda’.

She said: ‘He was speaking pretty wildly and strongly. I got very upset, I started crying and I had trouble continuing the conversation.

‘(He said) that it was my fault Alameda had gotten into that situation’.

Ellison said that she ‘absolutely could and should have done things differently.’

But she told the jury: ‘The fundamental reason was we’d borrowed these billions of dollars in loans and used them for illiquid investments.’

Assistant US Attorney Danielle Sassoon asked Ellison: ‘Whose decision was that?’

 Ellison said: ‘It was Sam’s’.

Sam Bankman-Fried dated Caroline Ellison and appointed her as head of FTX’s sister company Alameda Research 

Sam Bankman-Fried blamed Caroline Ellison for the collapse of FTX in court documents obtained by DailyMail.com. Bankman-Fried claimed that the culture at Alameda Research, FTX’s sister company which Ellison ran, had become ‘mediocre at best’ and said his ex was ‘not good enough to be able to trust’ with winding it up

The court has previously heard that Ellison and Bankman-Fried began sleeping with each other in 2018 and began dating properly in the summer of 2020.

Their relationship lasted a year before they broke up but got back together a few months later.

They finally broke up for good in the summer of 2022, when the scale of FTX’s problems became apparent.

Ellison was appointed co-chief executive at Alameda in 2021 – she and Bankman-Fried were ‘on a break’ at the time – and chief executive in 2022.

In her testimony Ellison has said that she broke up with Bankman-Fried for good because he was ‘not paying attention to me’.

The two have not looked at each other in court despite sitting a few feet apart.

Testimony has shown that Ellison was paid significantly less than the three other senior men at FTX.

She has told the court that her base pay was $100,000 and her biggest bonus was $20 million.

By comparison, securities filings have shown that FTX’s chief engineer Nishad Singh was paid $587 million, its co-founder Gary Wang was paid $246 million and Bankman-Fried got $2.2 billion.

Bankman-Fried is facing 115 years in jail and has denied 13 counts of fraud and money laundering.

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