Ex-Alameda CEO, Caroline Ellison, Picks Ex-SEC Official for Defense

The former head of Alameda Research has reportedly tapped an ex-SEC official to represent her.

Caroline Ellison, who was Alameda’s CEO at the time sister cryptocurrency company FTX began to implode, has hired Stephanie Avakian, former enforcement division chief at the Securities and Exchange Commission (SEC), Bloomberg News reported Saturday (Dec. 10), citing unnamed sources.

Avakian is representing Ellison along with other attorneys at her firm, WilmerHale, the sources said. At the SEC, she handled many of the government’s biggest crypto cases.

As PYMNTS has reported, FTX’s collapse began last month following news that founder and former CEO Sam Bankman-Fried had apparently used customer funds to prop up Alameda.

Bankman-Fried has spoken publicly about the case a number of times, including an interview in late November with the New York Times, in which he claimed he didn’t “knowingly co-mingle funds,” and referred only to “a lack of oversight” and “pretty big mistakes I’m embarrassed to have made.”

He also insisted to the Times’ Andrew Ross Sorkin that he “wasn’t running Alameda,” while seemingly placing much of the blame on Ellison, with whom he was once romantically involved.

Last week, Bankman-Fried said he had hired Mark S. Cohen, a New York attorney who represented convicted high-profile sex trafficker Ghislaine Maxwell, for his defense.

Bankman-Fried and current FTX Group CEO John J. Ray III are set to testify before the U.S. House Committee on Financial Services this week.

As PYMNTS reported recently, Bankman-Fried tweeted to committee chair Rep. Maxine Waters — with his replies off — that “As the committee still thinks it would be useful, I am willing to testify on the 13th.”

Witnesses who are invited to appear before Congressional committees typically make themselves available voluntarily.

Bankman-Fried’s reply came after he initially seemed unsure if he would appear, saying — again, on Twitter — that he needed time to “finish learning and reviewing what happened” before testifying.

His appearance Tuesday (Dec. 13) before the committee will presumably happen virtually, as Bankman-Fried’s whereabouts are unknown.