Who Is Caroline Ellison, Called the ‘Genius’ of the FTX Empire?

Closely linked to the FTX collapse, Alameda Research CEO Caroline Ellison’s rise was almost as spectacular as the fall. Here is the information for Caroline Ellison…

Key behind FTX and Alameda filing for bankruptcy: Caroline Ellison

The 28-year-old executive Ellison tweeted about two weeks ago to defuse tensions caused by the quantitative crypto trading firm Alameda, which he has been managing since last year, and its sister company, FTX. He stated that Alameda was not in serious financial difficulties. It even seemed to suggest that the company has more than $10 billion in assets. But things changed quickly.

As we reported as Kriptokoin.com, worried FTX customers could not withdraw their money. Then the value of the platform’s native token dropped. Allegations were circulating that Ellison, acting with FTX founder Sam Bankman-Fried, may have used billions of dollars from FTX clients to try and close the investment and bad transactions made by Alameda. Just days later, both companies filed for bankruptcy protection.

Was it possible to foresee the FTX collapse?

Customers and regulators are now looking for answers as the entire industry shakes in the wake of the crash. Past statements by Ellison and Bankman-Fried are scrutinized for clues as to how one of the biggest financial crashes in history may have happened. Was it possible to see the future of the FTX crash? Many of Ellison’s past comments are noteworthy, including his claim that using math as the head of a multi-billion hedge fund isn’t all that important.

In an episode of the El Momento podcast that aired on YouTube in May, he said of the trade, “I could absolutely make it without my math degree.” He later stated that he used “very little math” while working at the Alameda trading firm. He continued by saying that the mathematics he used was also at the “primary school level”.

What does Ellison’s Twitter personality point to?

The crypto manager’s social media posts were intriguing. In June 2021, he posted a screenshot of the books Amazon said he might like. Among them were several historical romance novels, including “Devil’s Cub” by Georgette Heyer and a History of the Third Reich by Richard J. Evans. “Okay Amazon,” Ellison wrote along with the screen recording. Two months ago she joked about taking amphetamines. “There is nothing like regular amphetamine use to make you appreciate how silly so many normal, drug-free human experiences are,” he wrote.

FTX CEO Sam Bankman Fried and Ellison’s purpose to change the world

It’s hard to imagine Ellison failing to grasp the meaning of borrowing billions of dollars from FTX customers to plug the gaps in Alameda. But as someone familiar with FTX and Alameda put it, Ellison had one goal: to change the world, and he was ready to do whatever it took. “They were willing to justify anything to do it,” the anonymous person said. “For example, they saw themselves as really valuable people… They saw themselves as smart, knowledgeable, and capable of making these big choices,” he said.

As a child, Ellison particularly enjoyed reading Harry Potter books, before focusing most of his time on mathematics. Caroline Ellison, the daughter of two MIT economists and two academics, also played a central role throughout her upbringing. Ellison competed in both math and linguistics tournaments while in high school. Ellison’s father, Glenn Ellison, heads the economics department at MIT, the same university where SEC Chairman Gary Gensler teaches. Ellison’s mother, Sara Fisher Ellison, is also a professor at MIT. Sam Bankman-Fried also earned a physics degree from MIT in 2014.

How were your Stanford days?

After graduating from Newton North High School, located about twenty minutes outside of Boston, Ellison headed west to study at Stanford. She said she’s looking forward to broadening her horizons in an FTX podcast in 2020. A former Stanford student who said they lived in the same dorm as Ellison and took a few classes with him, said Ellison was “academic oriented” and “very intelligent.” The student friend, who did not want to be named, described their relationship as “acquaintance” rather than close friends, adding that they had never seen any signs of “unscrupulous behavior” in Ellison.

Ellison said that during his studies, although he was not very interested in markets and investment before, he started to turn to finance. While at Stanford, he interned at quantitative trading firm Jane Street Capital. “I didn’t really consider myself a trader before I took any trades,” he later said on the FTX podcast. Ellison graduated from Stanford in 2016 and earned a BA in Mathematics. She joined Stanford’s “Effective Altruism” group outside of the classroom, according to her now-deleted LinkedIn profile. The organization’s website says it runs “discussion groups, guest dinners, career development sessions.”

Bankman-Fried, whom Ellison later met while working on Jane Street, also made clear their commitment to a philosophy that focused on using rational methods for philanthropy. Stanford’s “Effective Altruism” page describes this concept as a social movement “determined to combine compassion with reasoning and evidence.”

Jane Street: Meet and trading experience with FTX CEO

Ellison spent nearly a year and a half trading stocks on Jane Street before leaving the company in 2018 to join Bankman-Fried’s burgeoning crypto hedge fund Alameda Research on the FTX podcast. It is said that he and Bankman-Fried were extremely close, living together on the same luxury estate in the Bahamas, and at one point romantically involved.

After several years as an Alameda trader, Bankman-Fried promoted Ellison to co-CEO of the trading firm in July 2021. Then this August, when Sam Trabucco resigned, Ellison took over as sole CEO. Later, in a blog interview, when asked about his plans as CEO of Alameda Ellison, he talked about formalizing the cryptocurrency world. “We have come to occupy a rather unique space in the crypto industry,” he said in an interview. “We are here to help crypto markets become more organized and efficient,” he said.

Tumblr archive

Behind the scenes, Ellison has some unusual ideas. In a Tumblr account linked to Ellison, she openly discusses her views on maintaining a polygamous relationship and what a rigid structure should be like, according to her. Tumblr did not confirm that the account belongs to him. Ellison has not been heard from since his last Twitter post, in which Alameda said he had more than $10 billion in assets. Unlike Bankman-Fried, he remained silent. Only his past promises give clues as to what his current mentality will be like. On July 26, 2021, he posted a long Twitter thread about his decision-making process. The following expressions are used in tweets:

It seems like it should be important to get the hard decisions right. But in fact, if a decision is difficult, it is only marginal. That’s why I don’t think success usually comes from making the hard decisions right. Rather, it comes from looking for the biggest problems or opportunities and trying to solve them.