The FTX case, which seems like something out of a Hollywood movie, continues to attract attention. Former Alameda Research CEO Caroline Ellison dropped bombshell information during her deposition against FTX’s embattled founder Sam Bankman-Fried (SBF). Ellison’s revelations shed light on a network of fraud, massive losses and ambitious schemes in the cryptocurrency world. Here are the details…
$800 million loss
Ellison’s testimony began with a jaw-dropping revelation of a cover-up of millions of dollars in losses at FTX. Ellison revealed that in 2021, FTX suffered a staggering loss of $800 million due to a malfunction in its margin system. Shockingly, this massive loss was blamed on Alameda to hide it from FTX investors. According to Ellison, SBF had pushed Alameda to absorb the loss, stating that it “did not want FTX on its balance sheet.”
Additionally, Aditya Baradwaj, a former engineer at Alameda Research, brought to light lax security practices that contributed to significant losses approaching $200 million. Baradwaj explained that SBF prioritized rapid company growth over basic risk management protocols, leading to problems such as account reconciliation issues, inadequate testing, and lack of proper balance accounting. Alameda experienced three significant security incidents, including a phishing attack, harvest farm losses, and a security breach. These incidents exposed vulnerabilities in the company’s operations.
PART 3: THE HACKS
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How poor security practices at Alameda Research caused the company to lose hundreds of millions of dollars
(1/n) 🧵#SBF #FTX pic.twitter.com/RFocE7w3Gx
— Adi (e/acc) (@aditya_baradwaj) October 11, 2023
FTX founder was determined to drive Binance out of the market
Ellison’s testimony was not limited to financial mismanagement. He claimed that SBF was determined to force Binance out of the market by putting pressure on regulators. The goal was to increase FTX’s market share in the cryptocurrency industry. Although details of how this plan will work have not been revealed, it paints a picture of intense competition and ruthless tactics in the crypto exchange space. Additionally, Ellison revealed that although SBF has borrowed more than $660 million from BlockFi, they have a goal of receiving $1 billion from the Saudi Wealth Fund for blockchain-based games. These ambitious financial maneuvers, combined with a plan to take down the cryptocurrency Binance, laid bare SBF’s relentless pursuit of market dominance.
Moreover, cryptokoin.com As we reported this morning, there was also an attempt by the FTX inventor to manipulate the Bitcoin price. According to Ellison’s claims, Bankman-Fried wanted to sell BTC with customer funds in Alameda and keep the price below $20,000. The ongoing litigation against SBF is slowly revealing the complex web and grandiose schemes that haunt the FTX ecosystem. Cross-examination between Ellison and SBF is scheduled to begin on October 12. This promises even more revelations as key witnesses emerge in this courtroom.
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