The curious love affair at the heart of the crypto fraud trial
They made and lost billions. Now they’re in court.
For Caroline Ellison, the former girlfriend of Sam Bankman-Fried, there have been three main stages in her relationship with the cryptocurrency entrepreneur. First she was frightened of him. Then she fell in love with him. And now she is the star witness in his trial on charges of fraud and money laundering.
Although she seemed to struggle to recognise him when she gave evidence in court on Tuesday – Bankman-Fried had shorn his famous mop of unruly hair – the couple once conducted a lengthy clandestine relationship at his cryptocurrency hedge fund, Alameda Research. She became his co-chief executive, despite her doubts about her ability to do the job. But she wanted much more from the relationship than he did and he did not want to talk about it to anyone, including Ellison.
She resorted to addressing their problems in memos, using bullet points, and he replied in the same way. These notes and her recollections of the relationship are laid out in Michael Lewis’s new book on Bankman-Fried, Going Infinite, which documents a relationship of strange and sad dysfunction.
Ellison, 28, has pleaded guilty to fraud and is giving evidence against Bankman-Fried, 31, after reaching an agreement with prosecutors. It is alleged that before FTX, his digital currency exchange, went bankrupt in 2022 he and accomplices diverted billions of dollars from customers’ accounts to pay off creditors. He has pleaded not guilty.
Ellison first met Bankman-Fried at Stanford University, when he taught her class about trading. “I was kind of, like, terrified of him,” she recalled, according to Lewis. Ellison was later hired by the same Wall Street trading firm as him, then joined Bankman-Fried at Alameda Research, which he co-founded in 2017. On arriving there she was concerned to find that there were problems and an unhappiness among senior staff over his working methods that he had not warned her about. She called her mother and sobbed that she had made the biggest mistake of her life.
Ellison and Bankman-Fried shared an attraction to the philosophy of “effective altruism”, which advocates collectively working for the greater good. They had very different views on what they wanted from their relationship with each other, however, which became characterised by an unhealthy power dynamic and his seeming ambivalence to romance. Unlike Bankman-Fried, Lewis writes, Ellison “was unsure of herself and susceptible to being swayed by the opinions of others, especially men with whom she was involved. Unlike Sam, she wanted a normal life, with emotions and children and maybe even a sport utility vehicle in which to drive them around.”
In a 2018 memo to Bankman-Fried she confessed that she had “pretty strong romantic feelings for Sam”, referring to him in the third person, but that he had said he was “conflicted about having sex with me, then having sex with me, then ignoring me for a few months”. He was worried about scandal if news of their relationship leaked, as well as work-related tensions and “conflict of interest stuff”.
Bankman-Fried disappeared to Hong Kong and sent her a memo laying out some of the disadvantages in having a relationship with him. “In a lot of ways I don’t really have a soul,” he wrote, and “there’s a pretty decent argument that my empathy is fake, my feelings are fake, my facial reactions are fake. I don’t feel happiness. What’s the point in dating someone who you physically can’t make happy?”
Sometimes, he said, he really liked being with her but sometimes he just wanted to stay at work for 60 hours. His arguments in favour of a sexual relationship, listed in beyond-parody tech-geek honesty, included that he really liked talking to her, she was smart and impressive and “I really like f***ing you”.
Lewis, who had enormous access to Bankman-Fried, wrote that Ellison “wanted a conventional love with an unconventional man. Sam wanted to do whatever at any given moment offered the highest expected value, and his estimate of her expected value seemed to peak right before they had sex and plummet immediately after.”
Eventually, when they were both living in the Bahamas, from where they ran the businesses, they ended the relationship. Bankman-Fried moved out of the dollars 30 million penthouse condo they were sharing with a group of other effective altruists. Very few people knew then they had been having a relationship. Now it’s all over Lewis’s book and a Manhattan courtroom.
