Why did Caroline Ellison do it?

The Sam Bankman-Freed story is clearly a tragic one of Shakespearean arrogance, but I have long been troubled by the case of Caroline Ellison, former CEO of Alameda Research and star witness in the FTX trial, and now that her verdict has been reached, I find her actions even stranger and perhaps even sadder.

Ellison first spoke out, apologizing to everyone she’s hurt. “In some ways, I don’t think I’ll ever truly understand the extent of the harm that I’ve caused,” she said. “But that doesn’t mean I won’t try. So to all the victims and to everyone that I’ve hurt, directly or indirectly, I’m truly sorry.”

Ellison went on to say that while she’d always considered herself an honest person, she couldn’t have imagined herself being here in 2018. “The longer I worked at Alameda, the more intimately my sense of self became intertwined with what Sam thought of me, and the more I subordinated my own values ​​and judgments to his,” she said.

There was something cult-like about FTX and its sister company Alameda. The crypto industry is always on, and crypto traders are prone to sleep deprivation. Many traders, including Ellison, turn to stimulants such as Adderall, which suppress appetite and fatigue. Ellison never left her job, returning to the apartment she shares with friends and colleagues. Leaving her job meant abandoning those closest to her. In her words, she was isolated. “At each stage of the process, it was harder and harder to free myself and do the right thing,” she said.

And her relationship with Bankman-Freed was on-and-off. According to her lawyer, Anjan Sahni, she met Bankman-Freed in college and was in love with him “from the beginning.” Eventually, her world revolved around making him happy, resulting in a diary entry that read, “Sam doesn’t love me because I’m not good enough for him.” She added, “If I worked harder, I’d be good enough for him.” Some of this was down to inexperience, but those of us older know that work — or, really, relationships — doesn’t work this way.

of Letter submitted on behalf of Ellison She emphasized that she was a good, kind person, focusing on volunteerism, giving, selflessness, perfectionism, etc. Cults tend to attract good people, smart people, people who want to make the world a better place, and we know that Ellison was already connected to something cult-like called Effective Altruism, which is supposed to improve the world.

We also know that when Ellison was arrested, she quickly came clean. That’s one reason her testimony against Bankman Freed was “shocking,” said prosecutor Daniel Sassoon, who sought a lenient sentence for Ellison. “She is credible because she was forthright and did not try to downplay her role or avoid the most humiliating aspects of her conduct,” Sassoon said. “Unlike Bankman Freed, she was not cunning. There is no evidence that she was driven by greed or that a desire for risk or power was part of her nature.”

Judge Lewis Kaplan also mentioned Ellison’s testimony during his sentencing. “I’ve seen a lot of collaborators over the last 30 years, but I’ve never seen anyone like Ms. Ellison,” he said. Her testimony was consistent and incriminating. She made no attempt to exonerate herself, especially when it came to the damning spreadsheets — the falsified balance sheets that sealed Bankman Freed’s fate — it was Ellison who discovered the documents and reported them to prosecutors. It was as if she wanted a perfect grade in her cooperation with the government.

So what was Ellison’s personality like? Diaries submitted with her sentence show her trying hard to perform better at work, including resolutions such as “taking time off work to get off Adderall.” Ellison seemed focused on optimizing herself as much as possible, giving herself bullet-point advice like “build confidence by accomplishing the little things” and “give yourself positive feedback regularly.”

Listening to her testimony as she described the decisions she made during her time at Alameda Correctional Center was like watching a character in a horror movie make choices that played into the killer’s hands — at any point, a willingness to be selfish and disobedient could have saved her. “For reasons I find hard to understand, Bankman Freed had your soft spot,” Kaplan said.

For example, when Ellison joined Alameda Research, she learned that Bankman Freed hadn’t been completely honest with her about the company’s situation. Mass employee resignations had just occurred, and lenders were withdrawing millions of dollars. It’s not hard to imagine that anyone else would go bankrupt. After all, if Ellison could survive a short spell of unemployment, her previous job at Jane Street probably opened the door to many other places.

But she didn’t. According to her account, she stayed on after Bankman Freed convinced her that it was okay to lie and steal for a cause. Little by little, she got used to the fraud, eventually sending false balance sheets to lenders and stealing from clients. And in her diary, she wrote: Publication year The New York Times And the documents submitted as part of the sentence prove that she wanted to please Bankman Freed.

Perhaps Kaplan had a hard time understanding why Ellison got caught up in this, but I think I have a clearer picture now. Give Ellison an authority figure and she will try to please that person. She will be as submissive as possible, worry about how she can be better, and derive happiness from how close she comes to perfection. She will become a high performer, a trusted employee (and co-conspirator), and, ultimately, an unparalleled collaborator. If being good gets you these results, I suggest being bad.