December 1, 2022

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Who is Caroline Ellison and how did she end up in the midst of the FTX meltdown?

Who is Caroline Ellison and how did she end up in the midst of the FTX meltdown?

The collapse of Sam Bankman Fried’s FTX cryptocurrency exchange has brought more focus to the role played by Alameda Research and CEO Carolyn Ellison in the collapse of the company.

Ellison, 28, was raised by two economists at MIT and graduated from Stanford with a degree in mathematics. She met Bankman Fried at Jane Street Capital, a trading firm. Bankman-Fried, like Ellison, was raised by professors and the couple embraced the philosophy of “effective altruism”, which involves making large sums of money to fund charitable endeavors that benefit society as much as possible. The two were reportedly involved in an on-off relationship, According to CoinDesk.

Alameda Research CEO Caroline Ellison via Twitter (@carolinecapital twitter)

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When Bankman-Fried left Jane Street in 2017 to set up his own hedge fund known as Alameda Research, Ellison joined him shortly thereafter in what she called a “blind leap into the unknown”. She became one of the main dealers in the new company FTX related podcast Joining Alameda was “too great an opportunity to pass up” but dealing with the capital was “a bit daunting” when I first started working for the company in 2018.

“Mostly, it kind of was something I wasn’t used to thinking about,” she said. “So it was kind of — I don’t know, I think I was like a trader, I mean, not that long in Jane Street but for a year and a half, which was kind of more trading experience than a lot of Alameda traders had at the time. I kind of wanted To get in and be an expert on everything, but there are still a lot of things in the cryptocurrency world that I didn’t know about.”

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Alameda was a major cryptocurrency trader and It is frequently traded on the FTX platformAccording to The Wall Street Journal. Although Bankman-Fried was the founder and majority owner of Alameda, he eventually relinquished control of its operations and focused primarily on his role as CEO of cryptocurrency exchange FTX, which he founded in 2019. Billion and was the third largest cryptocurrency exchange in the world from terms of volume.

The fast-paced atmosphere and rapid growth of both Alameda and FTX have put more pressure on those at the helm. The Wall Street Journal reported earlier that steroid use was common among those in the upper echelon of Bankman Fried. Ellison tweeted last year, “Nothing like regular amphetamine use to make you appreciate how stupid a lot of natural, non-therapeutic human experiences can be.”

Sam Bankman Fried

Sam Bankman-Fried, Founder and CEO of FTX Cryptocurrency Derivatives Exchange, speaks during the Institute of International Finance (IIF) Annual Membership Meeting in Washington, D.C., US, on Thursday, October 13, 2022. (Photographer: Ting Shen/Bloomberg via Getty Images/Getty Images)

In October 2021, Ellison Named Co-CEO of Alameda With Sam Trabuco. I became CEO in August 2022 when I announced Trabucco on Twitter he was stepping down from the role. Trabuco said that Alameda’s leadership alongside Ellison was “difficult, stressful and exhausting,” but added that he “will remain a consultant.”

Cryptocurrency prices were close to all-time highs in the fall of 2021, but in early 2022 digital currencies were falling hard and many investment and lending companies in the sector faced financial stress.

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By early November of this year, reports of the financial health of both Alameda and FTX were mounting. Rival cryptocurrency exchange Binance has dropped a tentative plan to acquire FTX after due diligence revealed what Binance CEO Changpeng Zhao called a “messy” balance sheet in Interview with Susan Lee from Fox Business.

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The interdependent relationship between the two companies eventually led to their collapse, as FTX lent billions of dollars in client money from the exchange to Alameda in an effort to shore up the company’s finances. When nervous investors went to withdraw money from FTX, they were unable to meet these demands and entered bankruptcy.

During a video meeting earlier this month before the company and FTX filed for bankruptcy, he The Wall Street Journal reported that Ellison had informed Alameda employees of FTX’s use of client funds to help Alameda meet its obligations, and added that she, Bankman Fried and other members of the companies’ leadership were aware of the decision.

Fox Business’ Kayla Bailey and Aislyn Murphy contributed to this report.