Three months before the cryptocurrency market exploded last year, Caroline Ellison, the 27-year-old chief executive of crypto hedge fund Alameda Research, was plagued by self-doubt.
Ms. Ellison wrote in a Google document in February 2022, “I feel very unhappy and overwhelmed with my job.”
Ms. Alison had a lot on her mind. She didn’t think she was well suited to run Alameda or a particularly decisive leader, she wrote in another Google document. She was also going through a breakup with billionaire entrepreneur Sam Bankman-Fried, who founded Alameda, and then FTX, one of the world’s largest cryptocurrency exchanges. They had dated occasionally and Ms Ellison worried about “making things awkward” and “creating drama”.
“It really doesn’t feel like there is an end in sight,” he wrote in a February 2022 document.
Now Ms Alison is set to be a key witness at Mr Bankman-Fried’s criminal trial, which is due to take place on 2 October.
Mr Bankman-Fried, 31, is accused of misappropriating billions of dollars taken from customer accounts and faces eight counts of fraud and election law violations. Their spectacular fall, which sent FTX and Almeida into bankruptcy, transformed Ms. Ellison from a powerful – yet relatively private – figure into a target of tabloid speculation. In December, she pleaded guilty to fraud charges and agreed to cooperate with federal prosecutors investigating her ex-boyfriend.
His case is moving quickly toward a court hearing in Manhattan. Two other top FTX executives, Nishad Singh and Gary Wang, have also pleaded guilty and agreed to cooperate. In June, after weeks of legal wrangling over the charges against Mr. Bankman-Freed, the judge in the case set an expedited schedule for the trial, asking prosecutors to come up with a list of witnesses and other final materials. Two people with knowledge of the matter said prosecutors are expected to begin preparing at least some witnesses in August.
As Mr. Bankman-Fried’s sometime girlfriend and one of his early hires, Ms. Ellison had unique insight into the FTX founder. He also recorded many of his thoughts in writing, a handwritten diary and comments about his personal and professional life in Google Documents that have circulated among lawyers involved in the case, according to documents reviewed by The New York Times and four people familiar with the investigation.
The documents, which have not previously been reported, provide new insight into the psychology of Ms. Ellison during her final months at FTX. Ms Alison, now 28 prolific writer Whose Tumblr post about Harry Potter and Jane Austen has been widely dissected. But the Google documents are more personal and raw, some of them addressed directly to Mr. Bankman-Fried, reflecting the complexity of their relationship and his indecisiveness about Alameda.
In a Google document addressed to Mr. Bankman-Fried in April 2022, Ms. Ellison wrote that the earlier breakup with him had “significantly dampened my enthusiasm about Alameda.” Life in the hedge fund, he added, “felt connected with you in a way that was painful.”
A representative for Ms. Ellison’s legal team and a lawyer for Mr. Bankman-Fried declined to comment. A spokeswoman for the US attorney’s office for the Southern District of New York in Manhattan, the prosecuting unit of the case, also declined to comment.
Ms. Ellison, who is a Stanford graduate, got to know Mr. Bankman-Fried at Jane Street, the quantitative trading firm where she worked after college. They shared a commitment to effective philanthropy, a charitable movement that has gained followers in the tech and finance industries.
After Mr. Bankman-Fried left Jane Street to start Alameda in 2017, Ms. Ellison was recruited as a trader. in 2021 that PROMOTED He was appointed as co-chief executive, along with another initial appointment, Sam Trabucco.
Mr. Bankman-Fried and Ms. Ellison also began a volatile romantic relationship with several breakups and reconciliations. At times, Ms. Ellison worried that Mr. Bankman-Fried thought she was not good enough. In a February 2022 Google document, she wrote, when he was around, he had a “tendency to shrink, become small and quiet and submissive to others.”
After a split, Ms. Ellison ceased communication with Mr. Bankman-Fried. “I felt very hurt/rejected,” he wrote in an April 2022 Google document. “Not giving you the contact you wanted felt like it was the only way I could regain a sense of power.”
By last year, Mr. Bankman-Fried had become one of the world’s most prominent crypto entrepreneurs, with his face plastered on billboards and magazine covers. It appears that her fame has made life difficult for Ms. Alison at FTX and Alameda.
Being stable means “being around you all the time, listening to people talk about how great you are,” he wrote in an April 2022 document.
Ms. Alison was compensated too less generous compared to other top executives at FTX and Alameda, although it is unclear whether he was aware of this. According to court filings, the exchange’s founders and other key employees received $3.2 billion in payments and loans. Of that total, $6 million went to Ms. Ellison, while Mr. Singh, FTX’s engineering chief, received $587 million and Mr. Wang, one of the founders, $246 million. Mr. Bankman-Fried received $2.2 billion.
In May 2022, the crypto market crashed, causing coin prices to soar and many major companies to go bankrupt. During the crisis, regulators have claimed, Mr. Bankman-Fried, Mr. Wang, Mr. Singh and Ms. Ellison filled a hole in Almeida’s accounts using billions of customer funds deposited at FTX.
Even before this, Ms. Alison had doubts about her abilities. In an April 2022 document, she made a list of areas where she struggled, including “leadership” and “decision making”.
“Running the Alameda doesn’t feel like the same comparatively profitable or apt to do,” he wrote.
By last fall, Mr. Bankman-Fried had lost confidence in Alameda. According to court records, he considered closing the company and invested more than $400 million in another trading company, Modulo Capital, which was led by a different former Jane Street trader whom he also dated.
Ms. Ellison expressed jealousy and resentment toward Modulo in some of his writings, as well as a feeling that she was being squeezed, two people who have seen the documents said.
Mr. Bankman-Fried’s business empire collapsed in November when an $8 billion loss on deposits was exposed.
Ms Ellison wrote to him in a message that month, which was quoted in court records as saying, “I had a growing dread of this day dawning on me.” “Now that it’s actually happening it feels great to recover from it.”
In December, Mr. Bankman-Fried was arrested in the Bahamas, where FTX was located, and moved to a prison not far from the luxury penthouse that he and Ms. Ellison shared with eight other roommates, including Mr. Wang and Mr. Singh. Mr. Bankman-Fried is now under house arrest at his parents’ home in Palo Alto, California.
Those who know Ms. Ellison say they have been struck by her honesty and willingness to accept her failures. In court in December, she said she was “really sorry” for having committed the fraud. “I knew it was wrong,” she said.
Ms Ellison is expected to reiterate that claim at Mr Bankman-Fried’s trial, which is expected to last four or five weeks. Two people with knowledge of the matter said much of the trial would revolve around messages that Mr Bankman-Fried and three associates exchanged on the messaging app Signal.
As a woman in the male-dominated crypto industry, Ms Ellison may appear more sympathetic to the jury than other colleagues, said lawyers familiar with the matter. in interviews Last yearMr. Bankman-Fried placed some of the blame for the collapse on Almeida, saying he had little involvement in the day-to-day management of the hedge fund.
Moira Penza, a former federal prosecutor, said Best government aides accepted the blame on the witness stand and that the “power difference” between Ms Ellison and Mr Bankman-Fried could make them a compelling voice.
“It doesn’t seem to me to be an effective strategy to blame the defendant,” Ms. Penza said. “Especially with someone who was once a romantic partner.”