Caroline Ellison's Courtroom Testimony: SBF Orchestrated FTX's Collapse From the Start

The trial revealed damning evidence that SBF maintained direct control over Alameda’s fraudulent operations. Caroline Ellison, who led Alameda Research as SBF’s former partner, provided crucial testimony detailing how the FTX founder personally directed the misappropriation of customer funds on a massive scale.

The Conspiracy Behind the Scenes

According to court proceedings, Ellison coordinated with other senior executives including chief technology officer Gary Wang—who has since pleaded guilty—to execute what prosecutors describe as a systematic scheme. Rather than acting independently, Ellison testified that she received explicit instructions from SBF to implement the fraudulent transfer mechanism. The pair, who had previously met and worked together at Jane Street, maintained both professional and personal ties during the period when billions were being siphoned from FTX’s customer base.

The $14 Billion Trail

The scope of the fraud became evident through financial disclosures. Alameda ultimately required approximately $14 billion in debt repayment as a direct result of deploying FTX customer deposits for unauthorized investments and ventures. Ellison’s testimony established that SBF personally designed the systems and procedures that enabled these transfers, suggesting this was not a rogue operation but a calculated scheme at the highest levels.

Why FTX Could Not Survive

The interconnected nature of the fraud left FTX unable to meet redemptions in November of the previous year. Rather than being able to return customer funds, the exchange faced an impossible situation: obligations to lenders absorbed the capital that should have gone to users. Ellison’s account indicates this was entirely preventable had SBF not constructed the mechanism for Alameda to access customer deposits in the first place.

The testimony positions SBF as the architect rather than a bystander, with Caroline Ellison confirming that enterprise-wide fraud originated from explicit orders at the organization’s top.