Going Infinite: The Rise and Fall of a New Tycoon
by
Michael Lewis
Published 2 Oct 2023
Its relative strength had always been in arguably fairer markets, where they couldn’t simply buy the advantages offered to high-frequency traders by, say, the New York Stock Exchange. If firms like Virtu and Citadel were playing a speed game, firms like Jane Street were playing a brain game. Act II 5 How to Think About Bob It took only a couple of weeks of working for Sam before Caroline Ellison called her mother and sobbed into the phone that she’d just made the biggest mistake of her life. She’d first met Sam at Jane Street, in the summer before her senior year at Stanford, after he’d been assigned to teach her class of interns how to trade. “I was kind of, like, terrified of him,” she said.
…
She was surprised by the Jane Street partner’s lack of sentiment after his argument hadn’t landed as he imagined it might. “Once he saw I wasn’t going to change my mind about utilitarianism, my stuff is in a box,” she said. No one on the trading floor offered her so much as a hug. With her box of stuff, Caroline Ellison walked out onto the streets of lower Manhattan. Once there and on her own, her first thought was: God, I’ve made a huge mistake. But the thought passed. And in March of 2018 she moved to the Bay Area and took some time for herself before reporting to her new job. On her blog she described her feelings of liberation.
…
The moment Sam promoted him, however, his interest in work collapsed and he discovered a new taste for life’s pleasures. The shocking shift inside Sam Trabucco in the late summer of 2021 was hard to explain but impossible to deny. “The moment he became co-head of Alameda he checked out,” said an Alameda employee. That left Sam’s private hedge fund in the hands of its other co-CEO, Caroline Ellison. When he’d named her to the job, Sam imagined Caroline managing the people, while Sam Trabucco managed the trading risks. “People really liked being managed by her,” he said. By the fall of 2021 Caroline was effectively managing both the people and the trading risk while herself being managed only by Sam.
Number Go Up: Inside Crypto's Wild Rise and Staggering Fall
by
Zeke Faux
Published 11 Sep 2023
Singh was just a few months out of the University of California, Berkeley, and had just started a job at Facebook, but he bought into Bankman-Fried’s pitch too. He started as a lower-level developer, but as the firm grew, his personality made him a natural fit to manage the other programmers. A few months later, Bankman-Fried recruited another young mathlete whom he’d worked with at Jane Street. Her name was Caroline Ellison, and she was a soft-spoken redhead and a Harry Potter superfan. The daughter of MIT professors, she’d grown up in Newton, a suburb of Boston, where she was captain of the math team. Her effective-altruism awakening came at Stanford. Like Bankman-Fried, she liked to post online about weird utilitarian thought experiments, like whether a doctor should harvest a healthy patient’s organs to save five sick ones.
…
Owning an exchange (FTX) and a firm that trades on it (Alameda) was an obvious conflict of interest. On Wall Street it wouldn’t have been allowed, due to the risk that the trading firm would be given preferential treatment or access to confidential information. But Bankman-Fried assured me, and others who asked, that Alameda played by the same rules as other traders. Caroline Ellison and another young trader had been appointed co-CEOs of Alameda, and Bankman-Fried told me he now worked solely on FTX. In September 2021, Bankman-Fried relocated to the Bahamas. He uprooted the company again partly because Hong Kong required a lengthy quarantine for anyone who left the territory.
…
“It doesn’t, minute to minute, feel to me like a decision anymore.” * * * — I WANTED TO interview Bankman-Fried’s inner circle, to gain more insight into his trustworthiness. But I didn’t see Gary Wang, the coder, at his desk. I heard he liked to arrive at work in the evening and work through the night. And Caroline Ellison was in Hong Kong, like usual, running the hedge fund Alameda. The only one I spotted was Nishad Singh, who’d taken the title of FTX’s head of engineering. He sat at the desk to the right of Bankman-Fried. I pulled him aside for an interview. He was twenty-six years old, only a few years removed from University of California, Berkeley.
On the Edge: The Art of Risking Everything
by
Nate Silver
Published 12 Aug 2024
GO TO NOTE REFERENCE IN TEXT didn’t dispute the risks: Caroline Ellison testimony, October 10, 2023, 704–5. GO TO NOTE REFERENCE IN TEXT repay Alameda’s loans: Caroline Ellison testimony, October 11, 2023, U.S. District Court, Southern District, United States of America vs. Samuel Bankman-Fried, as prepared by Southern District Reporters, P.C., 765. GO TO NOTE REFERENCE IN TEXT he frequently checked: Caroline Ellison testimony, October 11, 2023, 753. GO TO NOTE REFERENCE IN TEXT substantial market downturn: Caroline Ellison testimony, October 10, 2023, 725. GO TO NOTE REFERENCE IN TEXT summer or fall 2021: Caroline Ellison testimony, October 10, 2023, 698.
…
GO TO NOTE REFERENCE IN TEXT Ellison warned SBF: Elizabeth Lopatto, “Sam Bankman-Fried Was a Terrible Boyfriend,” The Verge, October 10, 2023, theverge.com/2023/10/10/23912036/sam-bankman-fried-ftx-caroline-ellison-alameda-research. GO TO NOTE REFERENCE IN TEXT transcript I obtained: I obtained it for a fee. GO TO NOTE REFERENCE IN TEXT “thought 10 percent”: Caroline Ellison testimony, October 10, 2023, U.S. District Court, Southern District, United States of America vs. Samuel Bankman-Fried, as prepared by Southern District Reporters, P.C., 698. GO TO NOTE REFERENCE IN TEXT additional $3 billion: Caroline Ellison testimony, October 10, 2023, 703. GO TO NOTE REFERENCE IN TEXT didn’t dispute the risks: Caroline Ellison testimony, October 10, 2023, 704–5.
…
GO TO NOTE REFERENCE IN TEXT 71 percent chance: “Does SBF Get a Sentence of 20 Years or More?,” Manifold, manifold.markets/BenjaminIkuta/does-sbf-get-a-sentence-of-20-years. GO TO NOTE REFERENCE IN TEXT Ellison pled guilty: MacKenzie Sigalos and Rohan Goswami, “FTX’s Gary Wang, Alameda’s Caroline Ellison Plead Guilty to Federal Charges, Cooperating with Prosecutors,” CNBC, December 2022, cnbc.com/2022/12/22/ftxs-gary-wang-alamedas-caroline-ellison-plead-guilty-to-federal-charges-cooperating-with-prosecutors.html. GO TO NOTE REFERENCE IN TEXT on conflict-of-interest grounds: Justin Wise, “Paul Weiss Drops Ex-FTX CEO Bankman-Fried on Conflicts (Correct),” Bloomberg Law, November 18, 2023, news.bloomberglaw.com/business-and-practice/paul-weiss-drops-ex-ftx-ceo-bankman-fried-as-client-on-conflicts.
Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud
by
Ben McKenzie
and
Jacob Silverman
Published 17 Jul 2023
Sam quickly realized there was a lot of money to be made exploiting the difference—buy Bitcoin in the United States, sell it in South Korea, pocket the difference. He started his own trading firm, Alameda Research, to take advantage of it. Sam recruited a few close friends from MIT, including roommate Gary Wang, whom he had known since meeting him in high school math camp, and Jane Street colleagues like Caroline Ellison, with whom he had become close. They began operating out of a small space in Berkeley, not far from where Sam grew up. Eventually the kimchi premium dried up, but there were still massive inefficiencies to be exploited in the nascent crypto market. In 2019, Sam moved Alameda Research to Hong Kong in search of a more favorable regulatory environment.
…
Remember that when running a con, controlling access to information is crucial. The inner circle of the FTX/Alameda team lived in the same penthouse together and had personal ties to Sam. Nishad Singh, Director of Engineering at FTX, was a high school friend of Sam’s brother. Gary Wang, FTX’s cofounder, had known Bankman-Fried since math camp in high school. Caroline Ellison, the CEO of Alameda Research, worked with him at Jane Street. Caroline and Sam occasionally dated. All nine of the roommates were thirty years old or less. Another troubling aspect of Sam’s operations was the size of his political donations. Sam was Biden’s second-largest donor in 2020. He’d given $40 million to the Dems.
…
But down here on planet Earth, Binance was still far bigger than FTX and ostensibly better capitalized. It could afford to wait. And it could afford to take a loss if it meant taking down a reckless competitor who claimed his crypto empire would one day supplant Goldman Sachs. All hell broke loose as FTT began to slide in price. Sam and his lieutenants desperately tried to right the ship. Caroline Ellison, the CEO of Alameda Research, tweeted publicly at CZ, offering to buy all of his FTT for twenty-two dollars per token. It was a bizarre way to do business, especially when failure might mean existential peril, but for the umpteenth time I had to tell myself, That’s crypto. It also might have been a troll, a reference to when Sam once mocked a retail trader and said he’d buy all the Solana he had, before telling the guy to fuck off.