Former FTX Digital Markets co-chief Ryan Salame was sentenced to 7½ years in prison for making illegal campaign donations and operating an unlicensed money transmitter.

Ellison’s lawyers argue that her assistance was integral to the government’s case. As soon as FTX blew up in November 2022, Ellison returned to the US and began talking to the Justice Department and regulators.

She admitted to her own role in the fraud without “self-pity,” including how she used customer deposits as a line of credit at Alameda, and pointed prosecutors to crimes they didn’t know about. That included a scheme to bribe Chinese government officials to unfreeze assets.

The daughter of Massachusetts Institute of Technology economics professors, Ellison met Bankman-Fried as a summer intern at quant trading shop Jane Street in 2015. Three years later, over coffee in the San Francisco Bay Area, Bankman-Fried convinced her to join his new crypto trading firm Alameda Research, where she could make a lot of money and give it to charity.

Ellison worked “long, stressful, Adderall-fuelled hours” and considered leaving Alameda, but Bankman-Fried convinced her to stay, “telling her she was essential to the survival of the business, and that he loved her,” her lawyers wrote.

Letters from friends and Ellison’s own diary notes, filed with the memo, described Ellison becoming increasingly isolated once she moved to Hong Kong to run Alameda while balancing a secret and manipulative relationship with Bankman-Fried.

“A lot of what stresses me out about work is specifically failing Sam, or Sam’s disapproval,” she wrote in the summer of 2020. “I get easily upset when he disagrees with me or criticises me, in a way that I don’t think I get upset if other people do the same things.”

Met Gala

When Bankman-Fried was invited to the Met Gala in 2022, he rebuffed Ellison’s request to be his plus one, saying he didn’t want to be seen in public with her, the memo alleges. When the pair finally broke up, a friend of Ellison recalled her being “miserable.”

“Of course! She worked for a firm owned by her ex-boyfriend, in an industry that valorised him,” the friend, former FTX employee Leila Clark, wrote in a letter filed with the court.

Ellison warned Bankman-Fried against making illiquid investments with third-party loans, according to the memo, telling him even FTX customer deposits wouldn’t cover the shortfall if the market took a downturn.

That spending spree snowballed into the multibillion-dollar theft of customer funds that was at the heart of the criminal case. Ellison claims Bankman-Fried instructed her to use FTX customer deposits to repay Alameda’s lenders once they started recalling loans in mid-2022. Ellison also prepared balance sheets that misrepresented Alameda’s financial position to its lenders.

Living in fear

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“She lived in dread, knowing that a disastrous collapse was likely, but fearing that disentangling herself would only hasten that collapse,” her lawyers wrote.

Ellison’s lawyers argue she has been subject to relentless public scrutiny, including having details of her conversations with a psychiatrist and diary entries leaked. Now she is working as a volunteer and writing fiction and a math textbook.

Bloomberg

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