The “Lady Crypto” Behind the FTX Crash

Dubbed “Lady Crypto” by the media, Caroline Ellison is the woman accomplice to Sam Bankman Fried and the collapse of FTX. Together with the former FTX CEO, they dreamed of a digital revolution, a radical change in the world, under the banner of new technologies, artificial intelligence, biological weapons, and space governance.

A character now almost mythologized in the media, a story that is almost unbelievable. Caroline Ellison together with Sam Bankman Fried, were living their dream in a luxury resort in the Bahamas, practicing polyamory and using amphetamines, while FTX’s company was collapsing. 

Who is Lady Crypto, the woman complicit in the collapse of FTX

Caroline Ellison was the prototypical front-runner, good at any subject and what in the modern era is called “nerdy.” Born in 1994, she is the daughter of economists and studied mathematics at Stanford University, where she joined the elite circuit called the Effective Altruism Club of Stanford, a club where speculative and futuristic ideas are discussed.  

Her meeting with the controversial Sam Bankman Fried occurs after college. The Lady Crypto is hired by the trading company Jane Street and there she meets SBF. It is precisely Sam Bankman Fried who gets her into the world of cryptocurrencies, convincing her that starting from this kind of world will allow reaching the goals of the circle she attended at Stanford. 

In 2018, SBF asked Caroline Ellison to work for him in the new company Alameda Research. The following year, FTX is founded: the two seem to be traveling on the brink of success, both are part of the Forbes Under 30 list, the market is up, and things seem to be looking up.

While Sam Bankman Fried devoted himself to the administration of FTX, Alameda Research was in the hands of Caroline Ellison, and it was because of this connection that the crisis broke out. 

It is now clear what caused the colossus FTX to collapse, the huge exchanges of money between the two platforms to finance ultra-risky investments and why not, even luxurious residences in the Bahamas. 

Simply put, the close relationship between Alameda Research and FTX and thus, between Caroline Ellison and Sam Bankman Fried, allowed the two to withdraw hundreds of millions of dollars, unbeknownst to their clients. The belief of the two was that they had a way to return these investments, but as we know, that was not the case.

According to Fiona Smith, the founder of The Millennial Money Woman: 

“The examination should focus on what led to the downfall of FTX and Alameda. It is important to understand the context of why people like Caroline and SBF made the decisions they did-and why no one else decided to intervene or at least question their decision-making abilities. However, I do not think it is necessary to exploit someone else’s personal information as long as that personal information does not contribute to a verdict in the investigation itself.”

Could the media backlash toward Caroline Ellison bring fewer women into the crypto world?

Investors’ antipathy toward both perpetrators is quite justified given their criminal actions. However, it is clear that much of the criticism directed at Caroline Ellison is becoming less and less constructive with each passing day. In fact, it now ranges from being patronizing to simply being sexist and misogynistic. 

This may even come to add to the gender gap in the crypto ecosystem, driving women further and further away from this world. 

According to a research paper written by Julie Frizzo-Barker, out of 100 blockchain startups, only 14% of employees were women, and among those, only 7% held leadership roles.

Similarly, a 2018 study by Quartz states that: of the 378 venture-funded cryptocurrency and blockchain companies founded globally from January 2012 to January 2018, only one (0.3%) had an all-female founding team and 31 (8.2%) had a combination of male and female founders, according to Pitchbook. During the same period, 17.7% of all tech companies had at least one female founder.

The good news is that in recent years, female employment in the tech sector has grown steadily (20% for all positions).

Sadly, however, less than 5% of crypto investors, developers, and entrepreneurs are women. In conclusion, gender disparity in this sector exists and is evident. 

The FTX incident is a testament to serious mismanagement and perhaps, even fraud on the part of SBF and Caroline Ellison. However, the community’s reaction to this story is also a testament to how misogynistic the conversation in the crypto-community can be. Nothing highlights this more than how different the nature of the abuse directed against Ellison is, compared to SBF.