Former FTX executives Sam Bankman-Fried and Caroline Ellison appear to be turning on each other after the former suggested that she might be taking the fall for the crypto company’s collapse.
Ellison is reportedly willing to flip on Bankman-Fried with law firm Wilmer Hale after her ex-boyfriend suggested that she might be to blame for a missing $8 billion in customer money.
“The scoop in white-collar defense circles is that Ellison is weighing whether to turn on (Bankman-Fried) and looking for a plea,” said one attorney who has worked in law enforcement. “This firm is known to specialize in these deals.”
Top white-collar lawyers note that Wilmer Hale is one of the most politically connected law firms in the nation. It is known for striking settlements with the Manhattan U.S. Attorney’s Office, which is the nation’s top prosecutor of crimes involving the corporate world.
When Ellison hired Wilmer Hale, the Manhattan US Attorney’s Office worked feverishly to file criminal charges against those involved in what could be the largest fraud in the industry’s history.
Earlier last month, the once-famous cryptocurrency exchange FTX declared bankruptcy due to the disappearance of billions of dollars in customer cash housed in ostensibly secure accounts.
Authorities are looking into whether money from FTX customers was stolen and used to cover losses at Alameda Research, an affiliated prop-trading firm.
This comes after Bankman-Fried was forced to sell his company to his biggest rival, Binance CEO Changpeng Zhao, last month after the FTX saw around $6 billion of withdrawals within 72 hours.
Bankman-Fried, 30, was the second-biggest individual donor to the Democratic Party this election cycle. He ranked sixth on the overall list of individual donors for the 2022 midterms regarding federal contributions, with a total of $39,826,856, according to Washington, D.C.-based non-profit Open Secrets.
He has since gone on a media tour, telling select news outlets that he did not have all of the necessary safeguards in place to prevent the disaster, but that he still does not have proof that up to $8 billion in client money has vanished.
Bloomberg reported that Bankman-Fried saw his $16 billion fortune “eviscerated” in days, saying that the FTX co-founder was “on the brink of a 94% wealth wipeout” at the hands of his billionaire rival Zhao of Binance.
