Caroline Ellison, SBF's Former Girlfriend, Testifies SBF Directed Billion-Dollar Fraud Scheme

Caroline Ellison, the ex-girlfriend of FTX founder SBF and former CEO of Alameda Research, revealed critical details during her court testimony about how SBF orchestrated the misappropriation of billions of dollars from FTX clients. Her testimony has become a centerpiece in the high-profile case against SBF, exposing the inner workings of one of crypto’s most notorious fraud schemes.

Direct Orders to Commit Fraud

During her court appearance, Ellison testified that she did not act independently but received explicit instructions from SBF to execute the fraudulent operations. She told the court that it was SBF who “instigated” her to defraud FTX clients by diverting their funds. Ellison had met SBF years earlier at Jane Street, the prominent Wall Street trading firm, where they dated for several years before their involvement in FTX and Alameda.

Ellison’s testimony also implicated other senior Alameda executives in the conspiracy. She confirmed that former FTX Chief Technology Officer Gary Wang, who has since pleaded guilty, was among those who conspired with her under SBF’s direction to perpetrate the fraud that systematically extracted billions from FTX customers.

The $14 Billion Debt and System Design

Ellison revealed that SBF specifically designed a system enabling Alameda to access and misappropriate FTX client funds. According to her testimony, this unauthorized transfer amounted to approximately $14 billion, which Alameda subsequently had to repay to lenders—highlighting the staggering scale of the operation.

Why FTX Collapsed

When questioned about FTX’s inability to compensate users starting in November of the previous year, Ellison explained that the exchange became insolvent precisely because it lacked the funds to fulfill its obligations. The billions diverted to Alameda and then used to service debts left FTX without sufficient reserves to return customer assets. This chain of events, orchestrated under SBF’s direction, directly led to the collapse of the exchange and the cryptocurrency industry’s most significant bankruptcy.

Ellison’s testimony serves as key evidence that the fraud was not a rogue operation but a deliberate scheme personally directed by SBF himself.