Sam Bankman-Fried’s confidante Caroline Ellison, who has admitted to helping him steal billions of dollars worth of FTX customers’ assets, said during her testimony on Wednesday at his fraud trial that she had been “terrified” the truth would be revealed about the cryptocurrency exchange and that its eventual collapse last year brought an “overwhelming feeling of relief.”

The days leading up to the exchange’s insolvency in November 2022 were described by Ellison, the former co-chief executive of Bankman-Fried’s cryptocurrency hedge fund Alameda Research, with tears in his eyes. Ellison claimed that although she felt “indescribably bad” for the suffering done to FTX clients and staff, the collapse removed the “dread” she had been feeling.

She remarked through tears, “I felt a feeling of peace that I didn’t have to lie anymore. A box of Kleenex was given to Ellison by the courtroom deputy. According to the prosecution, Bankman-Fried stole billions from customers’ money to support Alameda, purchase real properties, and contribute more than $100 million to American political campaigns. In November 2022, FTX crumbled and filed for bankruptcy, startling the financial markets and shattering Bankman-Fried’s reputation as a trustworthy player in the cryptocurrency sector.

Ellison said on Wednesday that Bankman-Fried gave her the go-ahead to fabricate Alameda’s financial sheets to deter lenders after a decline in the cryptocurrency markets in 2022. She said that the balance statements Alameda supplied to cryptocurrency lenders like Genesis Global Capital hid the fact that the company had borrowed almost $10 billion in FTX client monies.

The 28-year-old Stanford University alumna said that Bankman-Fried, her former boss and errant lover, also gave her the order to withdraw money from the line of credit for the fund on the FTX cryptocurrency market to pay back debts by June 2022.

She is one of three former associates of Bankman-Fried who have admitted guilt to fraud-related offenses and consented to assist the Manhattan U.S. Attorney’s office. While admitting that he made mistakes while running FTX, Bankman-Fried has pleaded not guilty to two counts of fraud and five counts of conspiracy. He has maintained that he never meant to steal money.

In his opening remarks last week, defense attorney Mark Cohen urged the jury to consider whether cooperating witnesses like Ellison were giving previously accepted Bankman-Fried rulings a new, sinister twist.

“DO NOT LIE.”

Ellison testified earlier on Wednesday that Bankman-Fried did not adhere to moral guidelines like “don’t steal” and “don’t lie.” According to Ellison, the creator of FTX, identified as a “utilitarian” who believed that the only important guideline to follow was to accomplish the best for the most people possible.

“He didn’t think rules like ‘don’t lie’ or ‘don’t steal’ fit into that framework,” she said. She claimed that being surrounded by that attitude eventually helped her feel more at ease with performing activities under Bankman-Fried’s command that she knew were incorrect.

In addition, Bankman-Fried wanted to project the image of a “smart, capable, slightly eccentric founder,” and she felt his unpretentious demeanor and hairdo to be “very valuable.”

CRACKDOWN IN BINANCE AND SAUDI STAKE

As the value of Alameda’s assets decreased and cryptocurrency prices fell, Ellison claimed that knowing that the money required to pay back loans ultimately came from FTX consumers left her in a “constant state of dread.”

“Every day I was worrying about the possibility of customer withdrawals at FTX,” she stated.

Ellison said she and Bankman-Fried came up with several ideas for assisting his businesses. She said that he advised that FTX increase its market dominance by selling a stake to Saudi Arabia’s Crown Prince Mohammed bin Salman and pressuring officials to “crackdown” on competitor cryptocurrency exchange Binance.

Without further detail, Ellison said officials had “promised” Bankman-Fried that a Binance crackdown was imminent. In June 2023, the U.S. Securities and Exchange Commission filed a lawsuit against Binance and its creator, Changpeng Zhao, saying that they had misappropriated and mixed up consumer cash. Zhao and Binance have refuted the claims.

Former FTX technology head Gary Wang testified that Bankman-Fried falsely tweeted that the exchange was “fine” in November while it dealt with a spike in withdrawal requests. Former FTX engineering director Nishad Singh, a third cooperating witness, is also anticipated to appear during the trial, which may take up to six weeks.