Alameda CEO on FTX collapse: "A great feeling when it happened!"

Alameda CEO Caroline Ellison provides insight into her emotional world through her diary. From the downfall of FTX to her love affair with Sam Bankman-Fried.

FTX was the crypto sector’s "Wirecard" moment. In one fell swoop, Sam Bankman-Fried’s empire crumbled. Billions of U.S. dollars washed away. Within days, the darling of the industry became the most hated person in the crypto world. SBF is now on trial. Charges range from fraud to market manipulation to donation scandals. His old companions have long since turned their backs on him and are now testifying against him. Among them: Caroline Ellission, former CEO of Alameda Research and SBF’s ex-girlfriend. The 28-year-old kept diaries in several Google Docs that were leaked to the New York Times. In them, Ellison provides deep insights into the last days of the former "flagshipexchange" and her personal relationship with the crypto tycoon.

The relationship between Ellison and Bankman-Fried

"I couldn’t wait to get home, turn off my phone, have a drink and switch off." she wrote in a February 2022 post, adding that the job as CEO of Alamada, Bankman-Fried’s crypto hedge fund, had left her overwhelmed and unhappy. Self-doubt accompanied the then 27-year-old, which was compounded by her love affair with SBF. For Ellison, work and home were barely separable.

She met SBF at the time at the Jane Street trading house. When Bankman-Fried left the company in 2017 to found Alameda, Ellision became one of its first employees. Later, the two became a couple, constantly breaking up and getting back together. Her love for the company suffers from the on-off relationship, she says. Working at Alameda "felt in a painful way too connected to me".

Yet Ellision earned significantly less than other executives in the FTX empire. That’s according to an asset statement from March of this year. During her time at Alameda, she received just under $6 million. By comparison, FTX co-founder Gary Wang and chief technology officer Nishad Singh received multiples of that, $246 million and $587 million, respectively. Her boyfriend even pocketed $2.2 billion.

Self-doubt, jealousy and resentment

SBF’s growing success is gnawing away at their self-confidence and, as a result, at their relationship. While the crypto tycoon is becoming the industry’s poster boy, Ellison is struggling more and more. "I had to be around you all the time, listening to people say how great you were," she writes in the April 2022 document.

The former Alameda CEO goes on to list her weaknesses. Qualities such as "leadership" in "determination" are on it. "I don’t feel like I’m cut out for Alameda," she writes.

When the crypto market collapses a month later with the collapse of Terra, SBF begins pumping money into Modulo Capital, court documents show. In total, nearly $500 million flows into the trading firm. The founder of FTX still knows the director, Xiaoyun "Lily" Zhang, from his days at Jane Street. The two reportedly have a relationship.

Ellision has expressed envy of Modulo Capital in several writings, two anonymous sources tell The New York Times. SBF additionally flirted with the idea of selling Alameda in the fall of 2022, shortly before its demise. Ellison felt "squeezed".

"I knew it was wrong."

In the trial of her former boss and ex-partner, Ellison is now one of the prosecution’s key witnesses. In December, she admitted to falsifying financial reports in cooperation with SBF. "I really regret what I did - I knew it was wrong," she said in court.

In addition to remorse, however, Ellison must have felt redemption. When the crypto empire collapsed in November 2022, she wrote a bill to Bankman-Fried, which is before the court. Suddenly, the pressure she had felt for months seemed to fall off her. "I was afraid of that day. It pressed down on me ... Now that it’s really happened, it feels great that it’s over."