The ‘star’ witness of the trial, Bankman-Fried’s former girlfriend and business partner, Caroline Ellison testified yesterday on 10 October. Ellison alleged that the 31-year-old FTX co-founder and CEO had devised a scheme to defraud the company’s clients of billions. 

This is in conjunction with the crypto exchange’s $40bn (£33bn) bankruptcy in November last year, which US prosecutors are calling “one of the most significant financial frauds in the annals of American history.”

The exchange was unable to meet massive withdrawal requests from customers, and the situation was exacerbated by the discovery that a significant portion of FTX’s funds had been committed to risky operations overseen by Alameda Research.

Ellison once led Alameda Research, a personal hedge fund of Bankman-Fried, and claimed that Bankman-Fried had systems in place to siphon off approximately $14 billion (£11.3bn). According to the BBC, Ellison said Bankman-Fried ‘directed’ her to take customers’ money to repay loans he had obtained. 

She testified that Bankman-Fried “was the owner of Alameda and he directed me to commit those crimes” and claimed he “was the one who set up the system” that allowed Alameda to use client funds from FTX for investments and to pay off debts.

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Bankman-Fried’s defence team is expected to argue he had limited knowledge of Alameda’s operations and will try to shift the blame back onto Ellison. 

Bankman-Fried now stands accused of seven counts of fraud, embezzlement, and criminal conspiracy. If found guilty on all charges, he could face a potential prison term of more than 100 years. 

Ellison has already pleaded guilty to two counts of fraud and agreed to cooperate with the prosecution. Ellison also revealed that she and Bankman-Fried had a personal relationship as they dated for a few years, and lived in a luxury apartment complex in the Bahamas before Bankman-Fried was arrested and extradited to the United States late last year.