Cryptocurrency trader and former Alameda Research CEO Caroline Ellison recently testified at the trial of Sam Bankman-Fried that she was directed to donate $10 million to the presidential campaign of Joe Biden.
Alameda Research is the sister company of Bankman-Fried's now-defunct cryptocurrency exchange platform FTX. Prosecutors are alleging that Bankman-Fried defrauded customers and investors on FTX by siphoning their funds to Alameda Research, which served as a cryptocurrency hedge fund for Bankman-Fried, without their knowledge or permission. (Related: Sam Bankman-Fried's father complained about being paid only $200K a year when he expected an annual salary of $1M from FTX.)
As part of Bankman-Fried's trial, the prosecution rolled in its "star witness" in the 28-year-old Ellison, who was also briefly romantically involved with Bankman-Fried.
On Tuesday, Oct. 10, in a federal courtroom in downtown Manhattan, Ellison named Bankman-Fried as the ringleader of a fraud scheme at the cryptocurrency exchange and its associated hedge fund that stole more than $10 billion from customers and investors. She testified that she also committed fraud at Bankman-Fried's behest.
Ellison testified as part of a plea deal with federal prosecutors, which saw her plead guilty to several counts of wire fraud and conspiracy charges in December 2022 for her role in the collapse of FTX and Alameda.
Bankman-Fried spent tremendously on campaigns to garner influence
As part of Ellison's testimony, she admitted that Bankman-Fried directed her to donate more than $10 million to Biden in 2020 on his behalf.
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Ellison said the money donated to Biden was just a small amount of money for Bankman-Fried. What was important for him, she testified, was that this got him important recognition later on as a megadonor.
When asked by Assistant U.S. Attorney Danielle Sasson about what Bankman-Fried said about spending significantly on political campaigns, Ellison said her former boss thought it was a "very effective" strategy to gain influence.
"He thought it was very effective, that you could get very high returns for relatively small amounts of money," Ellison said.
Records from the Federal Election Commission note that Bankman-Fried personally donated only $52,800 to Biden's campaign through the Biden Victory Fund and Biden for President, although this does not include the millions more Bankman-Fried has been accused of donating to politicians under other people's names.
Other campaign finance data shows that Bankman-Fried also donated millions to the Democratic committees of different states and to other progressive groups during the 2020 election cycle.
Ellison further testified that Bankman-Fried directed her to siphon customers' funds from FTX, with a lot of the money going to loans made to members of Bankman-Fried's inner circle and going toward "investments and political donations."
In the succeeding campaign cycle in 2022, Bankman-Fried alone contributed over $40 million. Around $13 million went to Republican primary races. The remaining $27 million went almost entirely to the Protect Our Future PAC, which helped support the campaigns of dozens of Democrats running for Congress.
Learn the latest news from the world of cryptocurrency at CryptoCult.news.
Watch this episode of "The Glenn Beck Program" on BlazeTV as host Glenn Beck and guest investment banker Carol Roth speculate as to why the Justice Department dropped the campaign finance charge against Sam Bankman-Fried.
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