FTX’s Organizational Chaos
In federal court this week, Caroline Ellison, the former CEO of Alameda Research, testified against her former boss and boyfriend, Sam Bankman-Fried. His two fallen crypto enterprises offer an object lesson in how not to run a start-up.
First, here are four new stories from The Atlantic:
- Why the most successful marriages are start-ups, not mergers
- Against barbarism
- Gal Beckerman: “The left abandoned me.”
- The Protestant sleep ethic
Organizational Chaos
“How would you describe the power dynamic of your personal relationship with the defendant?” a prosecutor asked Caroline Ellison in court on Tuesday. Sam Bankman-Fried’s lawyers immediately objected to the question, and the judge sustained the objection. But all of us watching Ellison’s testimony in the federal courthouse heard the question. It hung in the air even as the prosecutor rephrased the inquiry.
At this point, FTX is many things: a company whose founder is on trial; a symbol for the rot underlying the crypto ecosystem; a target of . But before its dramatic implosion,, the company relied on shoddy recordkeeping (some of it intentional, Ellison said, to obscure the reality of their financial situation; some of it just apparently sloppy, like using for expense approvals). FTX is an object lesson in how not to run a start-up—featuring major trip wires of the tech industry, including ambiguous responsibilities, disorganization, and hubris. And, of course, the trouble went far deeper: Bankman-Fried, Ellison testified, presided over a culture where lying and stealing were acceptable.
