The founder of bankrupt crypto exchange FTX Sam Bankman-Fried is facing his ex-girlfriend in court.
On Tuesday, Caroline Ellison began testifying against the former crypto billionaire, who is on trial accused of stealing billions from customers.
As the former head of Alameda Research, Mr Bankman-Fried’s crypto trading firm, the 28-year-old is alleged to have played a pivotal role in the scheme.
She pleaded guilty in December, telling the court: “I knew that it was wrong.”
Mr Bankman-Fried has denied all the charges against him.
Ms Ellison took the stand shortly after 12:30 local time (16:30 GMT) and told the court that Alameda ultimately took about $14bn (£11.4bn) from FTX customers, using it for investments and repaying lenders.
Alameda was able to return some of that money to the exchange, she added.
Ms Ellison’s arrival on the stand was greeted with nervous laughter, especially after she struggled for a long moment to find Mr Bankman-Fried in the courtroom.
A wide range of people, from former FTX customers to casual observers, has been anticipating her first-hand account of what led the once powerful exchange to collapse last year, turning Ms Ellison into a star witness.
Ben McKenzie, the star of The OC who has written a book critical of crypto, was among the onlookers sitting in the courtroom and watching from overflow locations in the New York courthouse.
The company was once one of the biggest platforms in the world where crypto investors could buy and trade digital currencies. It went bankrupt in November, with more than $8bn reported missing.
Prosecutors allege that the fall came after Mr Bankman-Fried stole billions in customer money via Alameda, which had an account at the firm that allowed it to withdraw virtually unlimited money.
He allegedly used the funds to buy property, make political donations and fund Alameda, which made risky bets in crypto that caused trouble when crypto markets soured in 2022.
When Alameda lenders came calling that year, they say Mr Bankman-Fried directed Ms Ellison to tap FTX customer funds to repay its debts.
She has admitted to a range of charges, including lying about the relationship between the two firms, in expectation of a reduced sentence.
Mr Bankman-Fried’s lawyers have argued that Alameda’s relationship with FTX was characterised by business practices that were reasonable, given its role helping to ease trading on the platform.
In their opening arguments they claimed that the firm’s problems were fuelled by Ms Ellison’s failure to heed Mr Bankman-Fried’s warning to protect the firm against turmoil in the crypto markets.
Ms Ellison’s account is expected to be coloured by her on-off romantic relationship with Mr Bankman-Fried, which was a source of stress for both, according to filings from prosecutors and her own writings which Mr Bankman-Fried shared with the New York Times over the summer.
Doing so prompted his bail to be revoked, forcing him to await trial in jail after Judge Lewis Kaplan ruled that the move amounted to witness intimidation.
Ms Ellison met Mr Bankman-Fried when they both worked at the investment firm Jane Street.
The daughter of MIT economists who earned a maths degree at Stanford, she shared a family background rooted in academia and an ambition to make money to do good.
She is one of several members of Mr Bankman-Fried’s inner circle to take the stand against him.