Inside Sam Bankman-Fried’s On-and-Off Relationship With Caroline Ellison

Caroline Ellison's on-and-off relationship with Sam Bankman-Fried became the subject of public scrutiny ahead of the former Crypto King's criminal trial. Now, new details of their relationship have emerged in Michael Lewis’ new book, Going Infinite: The Rise and Fall of a New Tycoon.

Ellison left her job at trading firm Jane Street and moved to the Bay Area to work at Alameda Research, the hedge fund founded by Bankman-Fried, in 2018. Once she got there, and found out that in a few weeks Alameda was going to run out of money, she cried to her mom on the phone, Lewis wrote in an excerpt of his book, which was published Tuesday, for The Wall Street Journal.

After Alameda recovered $4 million in lost cryptocurrency Ripple and Alameda felt like it was finally on the right track, Ellison admitted to Bankman-Fried in a third-person, four-page note: “I have pretty strong romantic feelings for Sam.”

In the memo, she made a list of things Bankman-Fried did that bothered her, including giving “confusing signals, e.g. telling me that he felt conflicted about having sex with me, then having sex with me, then ignoring me for a few months.” 

She weighed the pros and cons of the relationship. The cons? Scandal if the relationship was to become public, conflict of interest and tensions at work. 

In a later memo to Ellison, Bankman-Fried also considered whether to continue his relationship with her, according to The New York Times. She was smart, impressive, a good person, and he enjoyed having sex with her, he wrote in the memo detailed in Lewis’ book. But power dynamics and negative publicity worried him.

“In a lot of ways I don’t really have a soul,” he wrote, according to the Times. “My feelings are fake, my facial reactions are fake. I don’t feel happiness. What’s the point in dating someone who you physically can’t make happy?”

Going Infinite details the stunning success and subsequent implosion of Bankman-Fried’s cryptocurrency exchange, FTX. For two years, Lewis embedded himself with Bankman-Fried, meeting more than a hundred times. 

In court documents filed in August, it was revealed that Ellison laid the blame on Bankman-Fried over the decision to use user deposits to plug FTX’s shortfalls when pressed by an employee just days before the exchange and Alameda both filed for bankruptcy. 

The prosecution is looking to put forward Ellison's personal notes and to-do lists as evidence, which include information about the financial health of Alameda and its liabilities to FTX, according to court documents.

Bankman-Fried was jailed in August after he leaked Ellison’s private writings to The New York Times and were published in an article in July, in what the court ruled as an attempt to harass and discredit her. In the notes, Ellison described how the on-again-off-again romantic relationship with Bankman-Fried left her unhappy and disengaged from her job. 

Ellison is likely to be a star witness in Bankman-Fried’s ongoing trial.