Villain or Victim: Deciphering SBF’s Girlfriend, Caroline Ellison

Intriguing revelations have recently surfaced concerning the aftermath of FTX's Chapter 11 proceedings, shedding light on the enigmatic figure of Caroline Ellison, the Chief Executive Officer of crypto hedge fund Alameda Research, or otherwise known as Sam Bankman-Fried (SBF)’s girlfriend.

The New York Times has gained access to private Google documents Caroline wrote last February that unravel perplexing details about her involvement in the failed financial empire once helmed by SBF. It appears that she was not a mere bystander but rather played a pivotal role in the fund mismanagement that led to the company's downfall. What is even more fascinating is that these documents indicate that Caroline had been aware of the impending crisis months before its eventual unraveling last November.

Feelings of Discontent and Unhappiness
In her personal notes, dating back three months prior to FTX’s collapse, Caroline expressed profound discontent and a sense of being overwhelmed in her role as Alameda CEO. Unveiling her inner thoughts, she candidly admitted doubts about her suitability as a leader, citing concerns about her decisiveness.

Complicating matters further, she found herself entangled in a breakup with none other than SBF, the billionaire entrepreneur behind Alameda and FTX. Their on-and-off romantic history left Caroline grappling with the fear of introducing discord into their professional lives.

“I have been feeling pretty unhappy and overwhelmed with my job. At the end of the day I can’t wait to go home and turn off my phone and have a drink and get away from it all. It doesn’t really feel like there’s an end in sight.”

With a distinctive vantage point as both a former romantic partner and one of SBF’s earliest hires, Caroline possesses unparalleled insight into the inner workings of FTX's founder. Notably, she chronicled her thoughts, experiences, and reflections, leaving a trail of handwritten entries in a personal diary and digital records on Google documents. Sources indicate that these documents, which have now come to light through The New York Times and individuals close to the investigation, have provided lawyers involved in the case with invaluable glimpses into her mindset during the critical final months of FTX.

Intriguingly, the Google documents convey a more intimate and unfiltered perspective, some of which are directly addressed to SBF. This unearths the complex dynamics of their relationship and lays bare her conflicting emotions about her role at Alameda.

A Romance Doomed to Fail
The relationship between SBF and Caroline proved to be a rollercoaster of emotions, characterised by a series of unstable breakups and reconciliations. Throughout their romantic journey, she grappled with self-doubt, fearing that she might not measure up to his expectations. In a revelation from a February 2022 Google document, she disclosed an unsettling tendency to shrink and recede into the background, deferring to others in his presence.

The on-again-off-again nature of their romance also left its mark, leading to instances where she felt hurt and rejected, ultimately prompting her to cut off communication with him at one point. Within a Google document dated April 2022, directly addressed to SBF, Caroline expressed how a previous breakup with him had significantly impacted her perception of Alameda. In her heartfelt words, she conveyed a profound sense of diminished enthusiasm about her role at the hedge fund, which had become intricately intertwined with memories of their past relationship. The emotional weight of this association proved to be a source of distress, making her journey at Alameda a painful experience.

Moreover, SBF’s rising fame and the subsequent spotlight on FTX and Alameda seemed to add further complexities to her life. The weight of this newfound attention likely intensified the pressures and challenges she faced within the realm of FTX and its associated hedge fund.

Battling Her Own Demons While Jealousy Rears its Ugly Head
In the April 2022 document, Caroline assessed her own struggles, highlighting areas like "leadership" and "decisiveness" where she felt challenged. Expressing doubts about her suitability to lead Alameda, she revealed that the role did not align with her comparative strengths.

It did not help that as time went on, it became evident that SBF’s faith in Alameda had waned significantly. Court records indicate that he even contemplated the possibility of shuttering the firm, instead investing a substantial sum of over $400 million in Modulo Capital, another trading company led by a different former Jane Street trader with whom he had a prior romantic relationship. Within her writings, Caroline voiced jealousy and resentment towards Modulo Capital, sensing that she might be gradually pushed aside, according to sources familiar with the documents.

Remorse and Relief
Fast forward to November, and SBF’s business empire experienced a catastrophic collapse triggered by a deposit run that exposed an alarming $8 billion deficit. In a message excerpted from court records, Caroline revealed the mounting anxiety she had carried, dreading the impending downfall. With the events finally unfolding, a sense of relief seemed to wash over her as she expressed, "Now that it's actually happening, it just feels great to get it over with."

One aspect that has left a lasting impression on those acquainted with Caroline is her earnestness and remarkable willingness to acknowledge her own shortcomings. During a court appearance in December, she demonstrated remorse by expressing that she was "truly sorry" for her involvement in committing fraud, recognising the wrongfulness of her actions.

As the criminal trial of SBF which will take place on 2 October approaches, slated to span four or five weeks, she is expected to reiterate her stance regarding her culpability in the matter. The trial is set to pivot significantly around the exchanges of messages on the messaging app Signal, involving SBF and the three cooperating individuals, shedding light on the intricate dynamics surrounding the case. Unfortunate victim of SBF’s charm or sheep in wolf’s clothing, as more revelations come to light, it will either be her timely undoing or her light at the end of the tunnel.