They were part of a “Chinese harem polyamory” group started in the Bahamas that mixed sex, pills and crypto. Now Sam Bankman-Fried and Caroline Ellison, the two executives at the center of the collapse of cryptocurrency firm FTX, seem to turn against each other.
After Bankman-Fried suggests she could be responsible for the missing $8 billion in client money, Ellison could signal she’s ready to turn against her ex-boyfriend with the hiring of law firm Wilmer Tan.
Top white-collar lawyers point to Wilmer Hale as one of the most politically connected white-collar law firms nationwide. He has a reputation for making deals with the U.S. Attorney’s Office in Manhattan, itself the nation’s top prosecutor for case-related crimes.
“The scoop in white-collar defense circles is that Ellison is wondering whether to turn on (Bankman-Fried) and seek a plea,” said a top lawyer who has worked in the forces of the United States. order. “This company is known to specialize in these transactions.”
Ellison’s hiring of Wilmer Hale comes as Manhattan U.S. Attorney’s Office scrambles to bring criminal charges against those responsible for what could be the biggest fraud in the history of the industry. In early November, once-popular crypto exchange FTX filed for bankruptcy as billions of client funds held in supposedly secure accounts disappeared.
Ellison and SBF also face civil fraud charges from the Securities and Exchange Commission, but the most serious case comes from federal prosecutors; Ellison and SBF could face years in prison if charged and convicted.
Prosecutors are investigating whether funds from FTX customers were misappropriated and used to offset losses at an affiliated accessories trading fund known as Alameda Research.
Alameda would be 90% owned by Bankman-Fried, but Ellison was the crypto-fund’s CEO at the time of the implosion. The two lived among a “cabal of roommates” in a luxury penthouse in the Bahamas, where they all reportedly dated. Ellison posted about his interest in BDSM sex and drug use, once saying that a “Chinese harem” was his favorite relationship status.
The FTX and Alameda crater sent shockwaves across the $1 trillion crypto business with digital coin prices zigzagging and Congress demanding increased regulation. billions of dollars in customer’s money remains absent from FTX as a bankruptcy trustee attempts to sort through SBF’s convoluted holdings.
Bankman-Fried, meanwhile, recently went on a media tour, telling selective news outlets that he still doesn’t know how much $8 billion in client funds went missing, but admitting he didn’t. not all the appropriate controls. in place to prevent disaster.
The House Financial Services Committee will hold the first of what will likely be many hearings on the FTX debacle on Tuesday. Over the past few weeks, SBF has said he really hasn’t spent much time on the Alameda trade, suggesting to some white-collar lawyers that he’s been looking to paint his former girlfriend as the culprit of his disappearance and missing money from customers.
But Ellison appears to be taking steps that show she could turn the tide on the Bankman-Fried, who was once worth nearly $20 billion and has built a cult following among media members and celebrities for her charitable donations and looks unorthodox and often chaotic. .