Caroline Ellison (born 1994) is an American former business executive and
quantitative trader who was the
CEO of
Alameda Research, the trading firm affiliated with the
cryptocurrency exchangeFTX and founded by FTX founder
Sam Bankman-Fried.[5] In 2022, she pleaded guilty to fraud, money laundering, and conspiracy charges related to her role at Alameda Research.[6][7]
According to an anonymous source cited by The Wall Street Journal in November 2022, Alameda Research owed $10 billion to FTX. The source said FTX had lent the trading firm money from customer funds at FTX.[8][9][5]
Ellison was terminated from her position after FTX and Alameda filed for
bankruptcy.[10] In December 2022, Ellison pleaded guilty to two counts of
wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit
securities fraud and conspiracy to commit
money laundering.[7]
Ellison graduated from
Stanford University in 2016 with a bachelor's degree in mathematics.[2][21][22] While at Stanford, she scored in the top 500 students in the 2013, 2014, and 2015
Putnam Competitions.[23][24][25] As a freshman, Ellison developed an interest in
effective altruism, a data-based philanthropic movement. She joined Stanford's effective altruism club and served as its vice president.[13][26]
Ellison and Bankman-Fried bonded over interest in effective altruism and remained in contact. In February 2018, while visiting the
San Francisco Bay Area, Ellison met Bankman-Fried for coffee and he pitched her on joining Alameda Research, a cryptocurrency hedge fund co-founded in November 2017 by Bankman-Fried and effective altruism colleague Tara Mac Aulay. Ellison joined the following month.[13][26][30] She said her "blind leap" was based on excitement over arbitraging cryptocurrencies and the potential to further her pursuit of
earning to give. When she joined, Ellison had more experience than most of the other traders.[13][31][29] She became co-CEO along with
Sam Trabucco in October 2021.[32] She became the sole CEO of Alameda Research in August 2022 after Trabucco stepped down.[32] Despite her position Ellison received no equity in Alameda Research and only a 0.5% stake in FTX.[33]
In November 2022, Ellison, together with
Sam Trabucco, was listed on Forbes 30 Under 30,[34] a pick the publication regretted a year later, placing Ellison on its Hall of Shame, featuring ten picks it wished it could take back.[35][36]
On 6 November 2022, after CoinDesk raised concerns about the balance sheet of Alameda Research and its relationship with FTX, Ellison said that the balance sheet information which had been released only included some of Alameda's assets, and that the firm had more than $10 billion of additional assets.[37][38] According to anonymous sources cited by The Wall Street Journal and The New York Times, Ellison was in a video meeting with employees on 9 November 2022; she admitted there that FTX had used customer money to help Alameda meet its liabilities and that she, Bankman-Fried, and two other FTX executives, Nishad Singh and
Gary Wang, were aware of the circumstances.[39][40]
Ellison was terminated from her position by
John J. Ray III after FTX, Alameda Research, and more than 100 related companies filed for
Chapter 11 bankruptcy.[10]
Legal proceedings
In December 2022, Ellison hired
Stephanie Avakian[41] of law firm
WilmerHale as her lead attorney.[42] On December 18,[43][44] Ellison pleaded guilty in the
Southern District of New York to conspiracy to commit wire fraud on customers of FTX, conspiracy to commit wire fraud on lenders of Alameda Research, wire fraud on lenders of Alameda Research, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering.[7][45][46] On that day, FTX co-founder
Gary Wang also pleaded guilty to several charges. A transcript of her plea hearing was unsealed on December 23, revealing she had admitted to judge
Ronnie Abrams that she and others conspired to steal billions of dollars from customers of FTX, while misleading its investors and lenders.[47] Ellison told Judge Abrams that Sam Bankman-Fried and other FTX executives had received billions of dollars in secret loans from Alameda Research.[48] As a part of her plea deal, she agreed to make restitution of an amount to be decided by the courts.[49]
In October of 2023 Ellison testified for the prosecution in the
fraud trial of Bankman-Fried.[50]
Personal life
Accounts about a romantic relationship with colleague Sam Bankman-Fried were reported by unspecified former employees.[51][26][52]Business Insider said that Ellison's alleged relationship with Bankman-Fried was singled out by CoinDesk.[53][54] Bankman-Fried told Good Morning America his relationship with Ellison was brief.[55][52]
Ellison, along with FTX senior employees, contributed to the FTX Foundation's Future Fund, which planned to fund philanthropic endeavors, before ceasing operations when its own senior staff resigned. The staff cited inability to honor grants and concerns about the legitimacy of its funding, leaving some beneficiaries concerned as to whether they would have to return grant money.[56]
^
abGuarino, Mark.
"FTX's Sam Bankman-Fried on crypto giant's collapse: 'A lot of people got hurt. And that's on me'". No. December 1, 2022. ABC News.
Archived from the original on 6 January 2023. Retrieved 7 January 2023. In the interview, Bankman-Fried also denied he witnessed any illegal drug use by FTX employees, and he said reports that he and Ellison were in a polyamorous relationship are false and his romantic relationship with Ellison lasted only six months.