Sam Bankman-Fried’s story is obvious enough: a Shakespearean level of hubris leading to tragedy. But Caroline Ellison, the former CEO of Alameda Research and star witness in the FTX trial, has puzzled me for some time. Now, after her sentencing, I think what she did is stranger and perhaps sadder.
Ellison spoke on his own behalf and began by apologizing to everyone he hurt. “I think on some level my brain can’t even comprehend the magnitude of the harm I’ve caused,” he said. “That doesn’t mean I don’t try. So to all the victims and everyone I hurt directly or indirectly, I say I’m so, so sorry.”
Ellison never really left work.
Ellison went on to say that she always considered herself an honest person and that her 2018 self couldn’t imagine being here. “The more I worked at Alameda, the more my sense of self became inextricably intertwined with what Sam thought of me and the more I subordinated my own values and judgments to his,” she said.
There was something of a cult to FTX and its sister company, Alameda. The cryptocurrency industry is always active, which tends to lead to sleep deprivation among crypto traders. Many traders, including Ellison, rely on stimulants like Adderall, which suppress appetite and fatigue. And Ellison never really left work; instead, she returned to an apartment she shared with her friends and coworkers. Leaving would have meant abandoning her nearest and dearest. She was, as she put it, isolated. “At every stage of the process, I found it harder and harder to break free and do the right thing,” she said.
And then there was her on-again, off-again relationship with Bankman-Fried. According to her lawyer Anjan Sahni, she met Bankman-Fried when she was in college and was in love with him “from the start.” By the end, her entire world revolved around whether or not she made him happy, leading to diary entries like, “Sam doesn’t want me because I’m not good enough for him.” She later wrote, “I can become good enough for him” by working harder, among other things. Some of this can be attributed to inexperience; those of us who are older know that’s not how a job (or, for that matter, a relationship) works.
He Letters sent on behalf of Ellison She emphasized that she was a good and kind person, focusing on her volunteer work, the money she gave away, her altruism and her perfectionist streak. Cults tend to attract good people, smart people, people who want to make the world better. And we know that Ellison was already associated with something cultish — effective altruism — that also aimed to make the world better.
“Unlike Bankman-Fried, she is not cunning.”
We also know that when Ellison was caught, she immediately confessed to what she had done. That was one reason her testimony against Bankman-Fried was so “devastating,” said prosecutor Danielle Sassoon, who argued for a lenient sentence for Ellison. She was credible “because of her candor and her refusal to minimize her own role or skirt around the most humiliating aspects of her conduct,” Sassoon said. “Unlike Bankman-Fried, she is not cunning. There is no evidence that she was driven by greed or that an appetite for risk or power is part of her nature.”
Even in sentencing her, Judge Lewis Kaplan singled out Ellison’s testimony. “I’ve seen a lot of cooperators in 30 years,” he said. “I’ve never seen one like Ms. Ellison.” Her testimony was consistent and damning; she did not seek to exculpate herself. In particular, when it came to the doom-laden spreadsheets — the falsified balance sheets that essentially sealed Bankman-Fried’s fate — it was Ellison who found the document and alerted prosecutors to it. It was as if she were seeking a perfect score in cooperating with the government.
So what was Ellison’s nature? The journals she submitted with the sentencing document show she was striving to improve at work, including resolutions like “taking time off work and detoxing from Adderall.” Ellison appears to be focused on trying to get as good as possible, giving herself pointed advice like “trying to do little things and build on them to build confidence” and “giving myself positive feedback regularly.”
During her testimony, listening to her talk about her decision-making during her time in Alameda was like watching a character in a horror movie make choices that favored the killer. At any moment, the willingness to be selfish and disobedient would have saved her. “For some reason that I find difficult to understand, Mr. Bankman-Fried had his kryptonite,” Kaplan said.
Give Ellison an authority figure and she'll try to please them.
When Ellison joined Alameda Research, for example, she discovered that Bankman-Fried had not been entirely truthful with her about the company's circumstances. There had been mass staff resignations and lenders had withdrawn millions. It's easy to imagine another person going bankrupt: after all, Ellison's old job at Jane Street would probably have opened doors to many other places if she could have stood to be briefly unemployed.
But she didn't. Instead, according to her testimony, she stayed on while Bankman-Fried convinced her that lying and stealing were okay for the common good. Gradually, she became more comfortable with dishonesty, until she began sending false balance sheets to lenders and pocketing clients' money. And like her diaries, both technology/ftx-caroline-ellison-bankman-fried.html”>published in The New York Times and presented as part of his sentence, shows that he wanted to make Bankman-Fried happy.
Maybe Kaplan had a hard time understanding why Ellison got caught up in this, but I think I have a clearer picture now. Give Ellison an authority figure and she'll try to please them, behaving as obediently as she can, stressing about how she can be better, and basing her happiness on how close she is to perfection. A straight-A student, a reliable employee (and accomplice), and eventually, an unrivaled cooperating witness. If this is what being a good girl gets you, I recommend being a bad girl.
