Things are looking bad for Sam Bankman-Fried. The founder of the cryptocurrency exchange FTX is being held accountable in a New York court for investment fraud, among other things. A key witness has now testified in this regard.

Caroline Ellison, former head of Bankman-Fried's hedge fund Alameda Research, admitted in her testimony to have colluded with the founder of the collapsed cryptocurrency exchange FTX. According to Ellison, Alameda drew several billion US dollars from FTX customers and used it for its own investments and to pay off debts. Additionally, Bankman-Fried reportedly instructed her to present a misleading balance sheet of Alameda to the fund's lenders.

When asked by a prosecutor if she had committed crimes, Ellison replied: "Yes, we have." The statement of the Stanford graduate and former partner of Bankman-Fried was eagerly anticipated. She had been appointed as co-CEO of Alameda in 2021 and was promoted to sole CEO last year.

In court, she had pleaded guilty in advance. Also, former technology chief Gary Wang recently incriminated his former boss. Nishad Singh, another former confidante of Bankman-Fried, will also testify during the proceedings.

All three had announced they wanted to cooperate with the prosecutor's office. Bankman-Fried has repeatedly rejected the fraud allegations and pleaded innocent. However, the authorities accuse him of billion-dollar fraud and embezzlement of customer funds.

It is claimed that he secretly moved funds to speculate with and finance his lavish lifestyle. In case of a conviction, Bankman-Fried faces up to 115 years in prison.

After graduating from university, Bankman-Fried was hired as a cryptocurrency trader at the brokerage firm Jane Street. He has made a fortune betting on Bitcoin price differences at exchanges in the US and Asia.

In 2017, he went independent with the brokerage house Alameda and in 2019 founded the cryptocurrency exchange FTX. The collapse of this exchange at the end of 2022 shook the crypto industry.