I came to New York expecting fireworks. For the better part of a year, in Substacks and deleted tweet threads and legal filings and in-person conversations under house arrest, it had become apparent that Sam Bankman-Fried was prepared to blame pretty much the entire collapse of FTX on Caroline Ellison, his on-again-off-again paramour who ran Alameda Research, the hedge fund that he owned and infamously absconded with billions of dollars in customer assets. Ellison’s testimony and cross-examination stood to be one of the two most jaw-dropping moments of the trial, second only to S.B.F.’s own likely appearance on the stand. (Given his ego and tolerance for risk, I expect Sam to testify in November.)  

Caroline’s time on the witness stand in the Daniel Patrick Moynihan courthouse was devastating alright—but for Sam, not her. Inside the room, the gravity was clear in her every utterance. Over three days, Ellison masterfully deconstructed the defense’s insistent counter-narrative that the destruction of FTX wasn’t fraud, per se, but rather a series of bumbling managerial and governance mistakes made by a wunderkind naif who should never have been running a business. But Ellison—poised, calm, pedantic, polite, confident and often flat—was insistent that all the crimes she committed were at the direction of her boss. And boy did she have receipts.

Since the fall of FTX, it was clear that if the Department of Justice was going to prosecute S.B.F., then his strategy would essentially be to prosecute Caroline. Sure, Ellison isn’t on trial—she pleaded guilty nearly a year ago—but maybe jurors might forget that for a second, if she could be made to look worse. There’s a reason Sam’s lawyers said Caroline’s name repeatedly in their opening statement. But when it came to the key moment of the trial so far, over some eleven hours of battle, the S.B.F. team whiffed and Ellison won. Her cross elicited only a few inconsistencies and was a massive missed opportunity for Sam’s team.

Here are a few observations from too many pages of hand-scribbled notes from two days inside the courtroom…

The Tears

The emotional high point of the first days of the trial came at about 2:55 p.m. on Wednesday, when Ellison started tearing up. Prosecutors had just spent hours walking her through the chronology of FTX’s mistakes, and how stressed she had been in the summer of 2022 as she and Sam shifted customer funds to fill the holes in Alameda’s balance sheet, leading up to the fateful final days of the company’s implosion. Prosecutors called upon an exhibit showing her Signal messages to Sam in the middle of the collapse. 

In the messages, Ellison told Sam that she was in “the best mood I’ve been in in like a year.” On the witness stand, Ellison described how she worried every day “about what would happen when the truth finally came out,” and described the “sense of relief” when she realized she “didn’t have to lie anymore.” Within minutes, she was being handed tissues by court staff and blowing her nose, overcome with emotion.

It’s easy to be cynical and think that this was all rehearsed. But whether real or contrived, it absolutely played in the room. The tears were the perfect display of emotion at the perfect time: They were not superfluous, but appeared to validate the notion that Ellison was a credible witness because she was always trying to do the right thing, and was overcome with tears of joy and relief when she could finally escape the burden of being a pawn in Sam’s scheme. 

Cohen’s Challenges

Sure, there were a few points where Caroline took some heat under questioning from Sam’s lead lawyer, Mark Cohen. She admitted that there were “periods of time” when Sam wasn’t paying much attention to Alameda’s work and that he trusted her to figure things out, especially given that Caroline “found it difficult” to talk to Sam after their romantic relationship capsized. Cohen acknowledged that she talked about resigning due to her supposed ethical concerns, but also underscored that she never actually quit.

Meanwhile, Caroline said that the sketchy balance sheets that she said Sam had her send to Celsius, the crypto lender at the core of the loan fraud charge against S.B.F., were more or less correct, depending on how you do the math. Caroline also admitted that she should have done a better job putting on trading hedges in 2022. She conceded to a brutal Cohen question about how she wanted to “crush” Modulo Capital, a competitor hedge fund also backed by Sam. And Caroline told the jury that she did indeed mislead her staff in those final months, calling into question her credibility as a witness.

Still, was that really it? I was shocked when Cohen said he had no further questions at 2:30 p.m. on Thursday. So much of Caroline’s testimony was left unaddressed. The point of Cohen’s questions often felt indecipherable, making arguments-by-implication or syllogism that must have gone over the heads of some jurors, who, of course, are coming to this story cold and have frequently shown signs of physical exhaustion. Learning about crypto wallets will do that to you. (I particularly feel for the juror who works an overnight shift and is coming to the courthouse afterwards.) 

Cohen has not been helped by Judge Lewis Kaplan, who every five minutes or so seems to admonish him for a poorly-phrased question or for reiterating an old line of argument. (Jurors notice when a judge, a person of authority, seems to disapprove of the defendant or their counsel.) Lines of questioning by the S.B.F. team were attempted and then abandoned within a minute or two after an objection, resulting in a disjointed presentation. Shortly after Cohen was interrupted for the umpteenth time by one of the prosecutors, I muttered to a colleague: “How is this convincing?”

New Revelations About the Collapse

Federal investigators have 1,300 discrete pieces of evidence, some of which have been revelatory, helping pull back the curtain on what exactly happened at FTX. A few favorites of mine: 

• A Signal message between a group of effective-altruist executives and advisers, including Will MacAskill, in which they strategized how to win the P.R. war ahead of an upcoming Michael Lewis visit to The Bahamas in February 2022. (Caroline says she hates doing personal P.R. Sam’s reply: “Same, except exactly the opposite.”)
  
• A Google Doc entitled “Things Sam is freaking out about” in which Caroline reports that Sam is obsessed with trying to raise money from Saudi ruler Mohammed bin Salman, trying to buy Snapchat, and the media sniffing around Alameda’s relationship with FTX.
  
• For the sausage-making of executive comms, I also enjoyed the Google Doc in which S.B.F., Caroline, Nishad Singh and Gary Wang workshopped possible tweets to reply to Binance chief CZ when he staged his public attack on FTX in November 2022.

A few revelations from testimony were just plain funny, too:

• S.B.F. thought he had a 5 percent chance of becoming President of the United States, according to Ellison.
  
• S.B.F. thought he got higher bonuses at Jane Street because of his iconic hair.
  
• S.B.F. tried to get money out of China by, at one point, having a frozen account lose money to an account tied to Thai prostitutes that FTX could control. (They ended up paying a $150 million bribe that Caroline would just call “The Thing” in internal communications.) Nota bene: Nothing makes bored reporters’ ears perk up like the phrase Thai prostitutes.

The Scene

The one question I’ve received more than any other, over the last two weeks, is “What’s it like?” First of all, the courthouse is a zoo. Only a fraction of the 50 or so reporters who arrive each day, beginning as early as 4:45 a.m., are able to snag one of the 15 or so seats set aside for the media. (I’ve preferred to just sneak in around lunchtime.) Inside the courtroom, Sam sits between his two main lawyers, typing away on his air-gapped laptop in his inch-too-short pink-purple tie; he is a man at work, fighting for his life. 

Over his right shoulder, two rows back, are his law-school professor parents, Joe and Barbara, who are there every day with family friends and spokespeople but are effectively members of his legal team. Joe and Barbara scribble feverishly on legal pads, exchanging notes about the latest proceedings, and then waiting around to say goodbye to Sam before he returns to jail each evening. Joe is a happier warrior—I’ve even seen him smiling during the trial a few times—while Barbara is more prone to displays of distraught emotion.

For such a high-profile trial, it’s been less chaotic than you might think. Sure, Martin Shkreli is hanging around, milking the scene for a few extra minutes of fame, and sure, there are also a handful of effective-altruist groupies and gadflies who begged for spots in the courtroom just so they could lay eyes on Sam or Caroline or even Shkreli. But the media glare has actually dissipated substantially since last December, when Sam was first indicted, and I wonder whether regular people are even interested anymore.

After all, the evidence of Sam’s guilt seems so overwhelming, the conclusion preordained. Some people have told me that there is not enough suspense to hold their attention, and that they would feel more invested if there was a plausible scenario in which Sam got off. If that path was to present itself, it might have emerged this week, during the cross-examination of Caroline Ellison. And, of course, it did not. The case is going as well for the government as it possibly could.