Caroline Ellison, the former head of Sam Bankman-Fried’s crypto hedge fund Alameda Research and prosecutor’s star witness in the criminal fraud case against the disgraced FTX founder, claimed in court that there was a plot to manipulate the Bitcoin price by selling the crypto if it exceeded the $20,000 level.
BTC Price Manipulation Plot Exposed
In the most salacious bit of testimony on Sept. 11, Sam Bankman-Fried’s former colleague and ex-girlfriend Caroline Ellison, shed light on one of the notes from a conversation with SBF in which she wrote: “Keep selling BTC if it’s over $20K,” implying a calculated move to stifle Bitcoin’s price. Prosecutors questioned her about the motive behind such efforts and their effects on the market.
Ellison, who ran Alameda Research, admitted to committing fraud related to the implosion of the FTX crypto exchange last year. Part of the 28-year-old’s plea deal with the government entails cooperating with the prosecution’s case against his former boss, Bankman-Fried.
Ellison also dropped other explosive allegations during her testimony. She revealed that at the direction of SBF, Alameda Research took a whopping roughly $13 billion from customers’ of the now-bankrupt FTX exchange by September 2022. The borrowed funds were allegedly used to repay loans, with other funds being funneled toward “investments and political donations”.
Bribing Chinese Officials
Ellison also spoke about paying a huge bribe to Chinese officials to access funds that had been locked on exchanges.
The Chinese government froze Alameda/FTX’s funds in response to a money laundering probe that did not involve both entities, she told the court.
They hired a lawyer in China to try and get the funds unfrozen, but he ultimately failed. Ellison said they then decided to send around $150 million in crypto to accounts which, to her understanding, belonged to Chinese government officials. Notably, the former Alameda CEO used coded language when reporting it to Bankman-Fried.
Market observers and the cryptocurrency community will be closely following SBF’s trial, which is expected to last six weeks, for any new bombshells regarding the Bitcoin price manipulation scheme and possible repercussions for crypto crook Bankman-Fried, Ellison.
Bulls are finding it difficult to maintain Bitcoin’s price above $27,000 as intensifying Israel-Hamas tensions dampen investor confidence. Although BTC is far off its historic high of $69,044 reached in 2021’s bull market, the benchmark crypto is still trading up 67% since the beginning of the year.