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Who Is Caroline Ellison, Stanford Grad and Former CEO of Alameda Research?

Caroline Ellison loved Harry Potter growing up and read the second book at age five — by herself.

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Caroline Ellison, former CEO of Alameda Research.

“I refused to wait for my parents to read it [to me],” she said.

Ellison recounted that story in a (now-private) podcast episode published in July 2020 on FTX’s YouTube channel. At the time, she was a trader at Alameda Research, the now-disgraced sister company to FTX. Both were created by wunderkind-turned-alledged-fraudster, Sam Bankman-Fried.

This week, he was arrested in the Bahamas and faces charges from entities including the U.S. Securities and Exchange Commission and the Southern District of New York.

Related: FTX Founder Sam Bankman-Fried Arrested in the Bahamas on U.S. Criminal Charges

In the fall of 2021, when Bitcoin was trading at a sky-high $57,000, Ellison, who had joined the team in 2018 as a trader, became its co-CEO, (along with Sam Trabucco who later left the company in August 2022) per Bloomberg.

While Ellison wasn’t a publicity fiend like Bankman-Fried, who testified to Congress about crypto regulation and positioned himself as crypto’s “elder statesman” (as Mary Childs of NPR’s Planet Money put it), New York Magazine recently called Ellison a “possible accomplice in what could be the biggest financial fraud in history.”

So far, Ellison has not faced any definitive regulatory action. However, at a press conference about the case, Damian Williams, attorney for the Southern District of New York, said, “I can say this clearly: We are not done,” and the following: “To anyone who participated in wrongdoing and has yet not yet come forward, come see us before we come see you.”

It all could be a lesson in the dangers of wand-waving. Here’s what we know about Ellison.

Who Is Caroline Ellison?

Ellison chatted with another FTX employee, Tristan Yver, for a public relations-type internal company podcast episode in July 2020, and discussed her background and upbringing. She said she primarily grew up in Newton, just outside of Boston. Her parents are economics professors: Glenn Ellison, a professor of economics at Massachusetts Institute of Technology (MIT), and Sara Fischer Ellison, also a lecturer at the prestigious university, per CoinDesk.

Ellison said on the episode that she inherited a natural aptitude for math and discussed getting into math competitions at a young age and eventually majoring in it college at Stanford. After applying to trading internships on a whim — a notoriously competitive process — and snagged one at Jane Street Capital, a high-profile firm on Wall Street (that prior to this, reportedly managed to stay out of the spotlight) and later worked there full-time for a year and a half.

What is Alameda Research?

Bankman-Fried founded what became his portfolio of crypto companies in 2017, starting with Alameda.

Bankman-Fried had started Alameda Research as a sort of high-risk, high-reward crypto trading firm, using tactics like arbitrage — he even said he called it “research” to give it a better vibe — back in 2017, taking advantage of the relatively “wild west”-like crypto environment, according to NPR.

Bankman-Fried expanded into more complex crypto trading accessible to more people with the founding of FTX, a crypto exchange, in 2019, leveraging his image as highly experienced in crypto, raising money from high fliers like BlackRock, per NPR.

How did Caroline Ellison meet Sam Bankman-Fried?

There are reports that Ellison met Bankman-Fried at Jane Street. He worked there from June 2014 to September 2017, according to his LinkedIn, which is still live, apparently.

Ellison said she learned about Alameda over coffee with then-CEO Bankman-Fried while visiting the Bay Area and decided “it seemed like too cool of an opportunity to pass up.” Ellison joined the company in 2018.

Eventually, Bankman-Fried resigned as CEO of Alameda, but he stayed CEO of FTX. In October 2021, Ellison became co-CEO with Sam Trabucco, a former trader at Susquehanna International Group.

Trabucco resigned in August 2022 to “spend a lot of time traveling,” he wrote on Twitter, while also noting that he “bought a boat.”

What happened to FTX and Alameda?

But it turns out things were pretty chaotic behind the scenes. FTX positioned itself as a white knight, buying flailing competitor Voyager Digital while the crypto world felt rising interest rates and a subsequent tech stock rout.

Related: ‘I’m Sorry. That’s The Biggest Thing.’ Sam Bankman-Fried and Cryptoworld Lose Big in FTX Meltdown, Company Files For Bankruptcy.

Then, CoinDesk reported that Alameda was heavily dependent on assets issued by FTX (which essentially lacked independent value) leading to customer panic — and the whole house of cards came falling down.

It turned out that FTX had been lending Alameda user deposits to cover its risky crypto trades. This would be like if Venmo lent customer money to a hedge fund that it was linked to in order to cover stock betting. It’s highly improper, to say the least.

Related: ‘A Complete Failure of Corporate Control’: FTX Corporate Attacks Sam Bankman-Fried in Bankruptcy Filing

On the firms’ financial processes in general, now-CEO of FTX John Ray III, who is shepherding the company through the bankruptcy process, said: “Never in my career have I seen such a complete failure of corporate controls.”

What was Caroline Ellison’s relationship with Sam Bankman-Fried?

There have been rumors of polyamory, a relationship style that involves connections with more than one person, in the Bahamas among FTX executives, where the company is based and where Bankman-Fried and Ellison lived, per CoinDesk.

“All 10 are, or used to be, paired up in romantic relationships with each other,” the outlet wrote.

He is now imprisoned there in a facility notorious for crowding and unsanitary conditions.

As Insider noted, in Tumblr blogs linked to Ellison, a user has posted about group relationship styles (as well as takes about disliking social justice culture and thinking women are bad at math). There have also been suggestions that FTX employees and Bankman-Fried spent lavishly on the island, from yachts to thousands of dollars a day on catering.

Is Caroline Ellison facing charges? Where is she now?

Ellison was not mentioned in FTX’s first-day bankruptcy filing. But she was discussed briefly in the SEC documents related to Bankman-Fried’s arrest. “During a meeting with Alameda employees on or about November 9, 2022, Ellison admitted that she, Bankman-Fried, Wang, and Singh were aware that FTX customer funds had been used by Alameda,” the complaint says.

Bloomberg also reported that Ellison took on legal representation — Stephanie Avakian, an ex-SEC official focused on crypto at the firm WilmerHale, citing people familiar with the matter.

Twitter users claimed to have spotted Ellison at a cafe in New York earlier this month.

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