Caroline Ellison: A Key Figure in the FTX Legal Drama

Caroline Ellison | Multi Hives

We are all aware of the FTX drama that happened last year. Right? Who is the villain, and who is the defender? Who knows? However, some characters have critical roles in the whole scene. Caroline Ellison is one of them! But before going into it, it’s essential to know teeny tiny details of her so we may see each step of Ellison toward FTX. So, shall we start?

Early Life of Caroline Ellison


Caroline Ellison was born in Boston and spent her childhood in the neighboring suburbs of Cambridge and Newton. Ellison has two more sisters, and she is the eldest. Ellison was raised in the Catholic faith. These sisters learned the economy too early in their lives. Ellison, in 2008, received top positions in the American Mathematics Competitions.

Later, she represented the U.S. in the International Linguistic Olympiad on behalf of her school – Newton North High School. Moreover, she graduated in 2012 along with the National Merit Scholarship. Overall, she has been a good student, a good daughter, and an excellent citizen.

The career of Caroline Ellison

Caroline's Leadership Style

During her time at Stanford, Ellison kick-started her career in quantitative trading with an internship at Jane Street. Jane Street is a proprietary trading firm in New York City. It was only a short time before she joined Jane Street full-time as an equities trader in a group guided by Sam Bankman-Fried. However, Bankman-Fried left the firm after a year to take up a role at the Centre for Effective Altruism in Berkeley, California.

Bankman and Ellison had some mutual passion that kept them connected. Their paths crossed again in February 2018 during Ellison’s San Francisco Bay Area visit. Over coffee, Bankman-Fried proposed she join Alameda Research, a cryptocurrency hedge fund he co-founded with effective altruism advocate Tara Mac Aulay.

As she was too involved in charity and was inspired by the cryptocurrency platform, the philosophy – of earning to give – made her mind ready to take a leap of faith, and she joined the team the following month. She was already very experienced in her career, so in a short time, she emerged as co-CEO alongside Sam Trabucco in October 2021. In August 2022, Caroline Ellison assumed the CEO role at Alameda Research.

Investigations Over Alameda Research Company

It’s worth noting that despite her significant contributions, Ellison did not receive equity in Alameda Research and only held a 0.5% stake in FTX. Then, in November 2022, Ellison and Sam Trabucco made it onto Forbes’s 30 Under 30 list, but a year later, Forbes regretted the decision and placed Ellison in its Hall of Shame for choices they wished they could undo. Moreover, CoinDesk raised concerns about Alameda Research’s finances and connection with FTX.

Investigations went on over the imbalance of finances. On this, Ellison said that only some of the assets of Alameda were included in the balance sheet and the firm had over $10 billion more in assets. Despite this, she confessed in a video that FTX used customer funds to cover Alameda’s debts. Ellison, along with Bankman-Fried, Nishad Singh, and Gary Wang from FTX, were said to be aware of the situation.

Following the bankruptcy filings of FTX, Alameda Research, and over 100 associated companies, John J. Ray III let Ellison leave her position.

Legal proceedings by Caroline Ellison

Early Years of Caroline Ellison-min

Legal proceedings took a dramatic turn in December 2022 when Ellison hired Stephanie Avakian, a top attorney from WilmerHale law firm, to represent her. On December 18, Ellison made a significant decision by pleading guilty in the Southern District of New York. Her guilty plea included charges such as:

  • Conspiracy to commit wire fraud
  • Wire fraud on lenders of Alameda Research
  • Commodities fraud
  • Securities fraud
  • Money laundering

She admitted to a conspiracy to embezzle billions of dollars from FTX customers while deceiving investors and lenders. Ellison also claimed that Sam Bankman-Fried and other FTX executives had received secret loans totaling billions from Alameda Research. As part of her plea agreement, Ellison agreed to repay an amount determined by the courts. Fast forward to October 2023, Ellison found herself testifying for the prosecution in Bankman-Fried’s fraud trial.

Summarising the Story of Caroline Ellison

Ellison’s story is closely tied to Bankman’s journey. Most of what people know about her revolves around her time at Alameda, except for some chatter about a Tumblr blog she supposedly wrote via her tweets. Even though she was technically leading Alameda at one time and keeping tabs on the finances, she testified in court that she wasn’t calling the shots. Surprisingly, unlike her close associates, she didn’t even own any part of Alameda.

At the beginning of her journey to Alameda, she had multiple tasks to do. Whatever she did includes:

  • Researching and improving trading models
  • Keeping an eye on automated systems
  • Managing transactions like Bitcoin across various exchanges

Now, with Sam possibly facing a long time in prison, while her sentence might be much shorter, perhaps her story could take a different turn.