FTX partner Caroline Ellison admitted to hiding billions of dollars in loans as part of her plea deal. Here are the details…
SBF and Ellison collude between FTX and Alameda
Caroline Ellison, CEO of Alameda Research, clarified some facts in collaboration with prosecutors. In addition, Ellison said that he and SBF conspired to deceive FTX customers. It also reached an agreement with Sam Bankman-Fried that allowed FTX to borrow unlimitedly from Alameda. Both executives hid this fact from investors and the wider public.
Alameda Research is generally considered to be FTX’s sister company. Because Bankman-Fried is the founder of both companies. FTX, founded by SBF, was operating as a cryptocurrency exchange before it crashed. Alameda, on the other hand, served as a hedge fund that allowed the two companies to work together. Ellison agreed to the lending arrangement in a statement to U.S. District Judge Ronnie Abrams in Manhattan federal court. He also said:
We have prepared some quarterly balance sheets that hide the extent of Alameda’s borrowing and billions of dollars in loans Alameda has made to FTX executives and interested parties.
SBF is under house arrest, the case will continue…
Ellison made this confession as part of his plea bargain. Although his defense took place on December 19, the transcript has not been opened to date. The fact that Ellison and fellow FTX partner Gary Wang chose to accept a plea deal was first revealed on Dec. This report also indicated that the two would cooperate in the ongoing lawsuit against Bankman-Fried. The unsealing of Ellison’s plea deal today revealed that he would not face penalties beyond fines and property loss as long as he cooperated more with the authorities.
At the request of the lawyers involved in the case, it turned out that Judge Abrams prevented Bankman-Fried from learning of Ellison and Wang’s collaboration. The court released Bankman-Fried on bail. He is under house arrest at his family’s home in Palo Alto, California. As we have reported on cryptokoin.com, the next court date is January 3, 2023. At the hearing on December 19, Ellison told the New York federal court that oversees FTX criminal cases that he was “really sorry” and “knows what was done was wrong”. He also said he knew FTX had allowed Alameda to borrow client funds. Ellison also said in his testimony in court:
I understand that if Alameda’s FTX accounts have significant negative balances in a particular currency, it means that Alameda is borrowing funds from FTX customers’ deposits on the exchange.
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