Caroline Ellison Confesses to Hiding Alameda Research’s Billion Dollar Loans from FTX
At a recent plea hearing in Manhattan federal court, former Alameda Research CEO Caroline Ellison admitted to purposefully deceiving creditors about the debt her trading firm was incurring from FTX exchange. FTX co-founder Gary Wang also gave a statement on the same day.
Alameda’s Trades Were Not Subject to Margin Calls
At a plea hearing in federal court in Manhattan on December 19, Ellison made her first public statement regarding her actions. According to a transcript of the hearing, she said, “I knew that it was wrong.” Gary Wang, a co-founder of FTX, also made a statement on that day.
I was aware that Alameda had access to a borrowing facility on FTX.com, the cryptocurrency exchange run by Mr. Bankman-Fried, from 2019 through 2022, Ellison claimed. Practically, this arrangement allowed Alameda to access an unlimited line of credit without having to post collateral, maintain negative balances, or be subject to margin calls under FTX.com’s liquidation protocols.
After pleading guilty to fraud charges, Ellison and Wang have decided to help out the Manhattan federal prosecutors. Bankman-Fried’s representative could not be reached for a response regarding statements from Wang and Ellison.
The FTX and Alameda saga continues to unfold and more findings are being brought to the limelight. Although, the disgraced crypto billionaire, Sam Bankman-Fried was released on Thursday, he still maintains his stance in not being responsible in the fall of FTX as opposed to criminal charges labelled against him.