Just when the FTX power milestone was handed over to the liquidators John J Ray IIIthe bankrupt crypto exchange has sacked three of its top executives, including one Caroline Ellison who once led Alameda Research.
The collapse crypto exchange once the world’s biggest, lured the spotlight beyond founder Sam Bankman-Fried into his inner circle, and landed on Ellison, a rare female leader in a male-dominated industry.
Driven by a Philosophy of Effective Altruism
Before finding himself at the center of the collapse crypto At its most massive, Caroline Ellison is a star schoolgirl. His father, Glenn Ellison, is head of the economics department at the Massachusetts Institute of Technology. Meanwhile, Ellison’s mother, Sara Fisher Ellison, is a senior economics lecturer at MIT. “We really hit a lot of economic trouble,” Ellison told Forbes in an interview.
Ellison, who attended Newton North High School, has a special talent for math. In 2012, Ellison enrolled at Stanford University, where he studied mathematics. Ruth Ackerman, a mathematics professor who taught Ellison, described Ellison to Forbes as “intelligent, focused, very mathematical”.
Like his girlfriend, Bankman-Fried, Ellison began exploring effective altruism in college. It is a philosophical movement that uses calculation to understand how people can best use their time, money and resources to help others.
He eventually joined Stanford’s Effective Altruism Club. Ellison is involved in a club devoted to Effective Altruism, a philosophical movement in which adherents seek to do the maximum of social good using evidence and reason.
After graduating from college, Ellison then worked at the trading firm Jane Street. There, he met Bankman-Fried, and the two allegedly bonded over their interest in effective altruism.
In March 2018, Ellison got into a serious conversation with SBF over coffee in California. Sam Bankman-Fried, a businessman crypto who was single at that time, suggested him to join Alameda Research.
SBF wants to partner with Ellison at Alameda, which he just worked on, to exploit differences in Bitcoin prices in various countries.
“This is the perfect arbitration. Where the exchange will help reach billions for charity,” said the SBF.
“I was like, wow, that sounds really exciting. I mean, I really like Jane Street. It was a very difficult decision to leave,” Ellison told Forbes in a previously unpublished interview in October 2021.
After Bankman-Fried convinced him to jump on Alameda in 2018, Ellison realized he had arrived at a haphazard startup. “It’s a lot like, oh, yeah, we didn’t really know what we were doing,” Ellison said.
Ellison also met with Bankman-Fried confidants Nishad Singh, Gary Wang, and soon after, Sam Trabucco, who would each take on executive roles with Bankman-Fried. They also share a tacit bond over their interest in effective altruism.
His Whole Goal Is Just Wealth Maximization
When Bankman-Fried decides to step away from Alameda to focus full-time on thriving FTX, Ellison, the quiet and quirky son of an MIT economics professor, takes over as co-CEO.
Ellison began taking on more responsibilities at Alameda Research. Thanks to the promotion, he and his partner, Sam Trabucco, went deep Forbes‘ 30 Under 30 in 2022.
FTX and Alameda Research are sister companies founded by Sam Bankman-Fried, who promoted Ellison to run the trading company last year after taking him from another company in 2018.
The couple and eight other young technology executives run the company while living together in the $40 million Bankman-Fried penthouse in the Bahamas.
Shortly thereafter, Ellison found himself in sole control of Alameda when Trabucco stepped down as co-CEO in April, months before he publicly announced his departure in August, according to a former Alameda employee.
On Twitter, Trabucco said the role was “taxing and consuming” and he recently “didn’t really work at all.”
Ex traders Susquehanna, who graduated from MIT a year after Bankman-Fried, said she was leaving after “significantly reducing” her role over the past few months.
“It has been a very formative experience working with @AlamedaTrabucco. I hope he has fun on his boat!,” Ellison tweeted at the time.
A few months later, it all started to come crashing down. Last week, Binance CEO Changpeng Zhao announced his company would acquire FTX, saving it from a liquidity crunch.
But Binance quickly backed out of the deal after due diligence, citing “mishandled customer funds and an alleged US agency investigation.”
Previously, it was reported that high-ranking officials from FTX-affiliated companies, Alameda Research, said they knew that the funds they received from FTX were funds from crypto exchange users who had been declared bankrupt.
This was reported by Wall Street Journal (WSJ)Saturday (12/11/2022), based on information from an anonymous source.
the source told WSJAlameda Research CEO Caroline Ellison and several senior FTX officials knew that FTX was indeed lending user funds to Alameda to pay debts.
Results Nansen’s research confirmed the report, which observed an unusually large stablecoin token outflow from FTX to the Alameda wallet during the time period prior to its collapse.
Within days, Bankman-Fried’s empire faced stunning collapse, and several of its entities filed for bankruptcy, including Alameda.
In recent days, Ellison has faced a very bad barrage of criticism from supporters crypto who blamed him for overseeing Alameda’s downfall.
Now, the Department of Justice and the SEC, along with local authorities in the Bahamas, are investigating the situation. Questions swirled about how Alameda lost all the customer funds FTX allegedly transferred to sustain the failing company.
Bankman-Fried’s luxurious Bahamian penthouse is reportedly up for sale for US$40 million. And Ellison, once a background figure in the great shadow of Sam Bankman-Fried, has risen to a level of infamy of his own.
Rumors are circulating online that Ellison is planning to flee Hong Kong for Dubai, which has no extradition treaty with the US, but his whereabouts are currently unknown. His last public statements were a pair of tweets on November 6, defending criticism of the company’s balance sheet.
“Their whole goal is to maximize wealth. They’ve never lived in a world where they don’t take a lot of risks,” said an Alameda employee of the founder and the circle of executives, which included Caroline Ellison. [ab]