Caroline Ellison, the former CEO of Alameda Research, testified during Sam Bankman-Fried's fraud trial that one of her goals was to increase regulatory pressure on Binance in order to boost the market share of FTX, the crypto exchange associated with Alameda Research. Ellison revealed this information as she discussed her role in trying to prop up FTX and Alameda during the trial on October 11.
According to Reuters, Ellison, who had previously pleaded guilty to aiding Bankman-Fried in the misuse of billions of dollars of FTX's assets, stated that she and Bankman-Fried had brainstormed various strategies to enhance FTX's standing. One of these strategies involved leveraging a regulatory "crack down" on Binance. Bankman-Fried had allegedly assured Ellison that regulators had "promised" him that regulatory pressure on Binance was imminent. In June 2023, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its founder.
Prior to its collapse in November, FTX held the position of the second largest crypto exchange in the world, trailing only behind Binance, according to Watcher Guru.
In addition to these revelations, the New York Post reported that Bankman-Fried had a 45-minute Zoom call with SEC Chair Gary Gensler in March 2022. This occurred six months before FTX collapsed and Bankman-Fried was arrested on fraud charges. The meeting between the "disgraced crypto mogul" and the regulator has raised concerns about potential conflicts of interest. A Freedom of Information Act request has revealed no evidence that Gensler obtained permission from the SEC's Office of the Ethics Counsel to hold the meeting, which experts say violates the SEC's protocol. Experts also speculate that even if Gensler had sought permission, it is unlikely that he would have been granted it.
Bankman-Fried's trial began earlier this month and is expected to last up to six weeks, as reported by Reuters. The testimony from Ellison sheds light on the alleged efforts made by FTX to increase its market share through regulatory actions against Binance.
