coindesk.com
This is a developing story and will be updated frequently throughout the day.
NEW YORK — Former Alameda Research CEO Caroline Ellison retook the stand on Wednesday, after testifying that her former boss and ex-boyfriend, Sam Bankman-Fried, had directed many of FTX's now-public missteps.
Ellison began her testimony on Tuesday, and opened by saying she committed crimes with Bankman-Fried by sending balance sheets that misstated Alameda's assets and liabilities to the crypto hedge fund's lenders and by taking FTX customer funds and using them to repay debts or for investments, to the tune of around $10 billion.
Things fell apart in November 2022, Ellison said, when asked Tuesday what happened when customers tried to withdraw their funds.
"Initially FTX was able to process some withdrawals, but pretty soon it started running out of money. Alameda tried to send more money to FTX, but there wasn't enough to cover all the customer claims," she said. This was "because Alameda had taken it to make our own investments and to repay our lenders."
Over the course of her first day of testimony, Ellison walked the jury through how Bankman-Fried, despite naming her (and for a spell, Sam Trabucco) as CEO of Alameda, still largely retained control over the firm's decisions, and how he disregarded her advice on issues like whether to expand FTX's investment portfolio.
Alameda's inability to sell large portions of the FTT token came up. Selling the token would have depressed the price enough to dramatically hurt Alameda's credit with lenders, she said.
"Bankman-Fried gave us a lot of instructions about FTT; at various points he instructed us to buy if there was a large amount of selling or if the price was going down too much," she said.
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