Former Alameda Research CEO Testifies to Shocking Claims of Government Ties
Caroline Ellison, the former CEO of Alameda Research and ex-girlfriend of FTX founder Sam Bankman-Fried, made stunning revelations in court regarding the crypto hedge fund’s connections to international government officials. Ellison confessed to falsifying balance sheets to deceive investors and hide the fact that they were borrowing billions of dollars from FTX customers. Testifying under a cooperation agreement with the US government, Ellison expressed remorse for her actions.
Fears Leading up to FTX’s Collapse
Ellison revealed that she had been living in constant dread as FTX approached its collapse. Alameda Research had illiquid assets worth $21 billion and liabilities exceeding $14 billion by 2022. She testified that she and Bankman-Fried analyzed potential market scenarios that could harm their crypto empire. Despite calculating a 100% probability of being unable to repay loans during a market downturn, Bankman-Fried directed Ellison to use customers’ funds to repay their debts.
Bankman-Fried’s Desperate Attempts to Raise Funds
With limited capital left, Bankman-Fried attempted to sell shares to Saudi Arabia’s Crown Prince but failed. Ellison also claimed that Bankman-Fried was concerned about sensitive conversations being exposed, prompting him to enable an automatic deletion feature on their encrypted messaging platform. He insisted on following “The New York Times Test,” where employees should only communicate information they would be comfortable seeing as a headline.
Bribing Chinese Government Officials
A damning piece of evidence emerged when Ellison recounted Bankman-Fried bribing Chinese officials to unlock Alameda’s frozen trading accounts on OKX and Huobi exchanges. After failed attempts with a lawyer and using Thai prostitutes’ trading accounts, bribery became their last resort. When a trader advised against this, Bankman-Fried responded aggressively. Ellison provided this testimony while Bankman-Fried remained silent in the courtroom.
Hot Take: Testimony Unveils Alameda Research’s Troubles
Caroline Ellison’s testimony during the trial shed light on the deceptive practices and desperate measures taken by Alameda Research and its founder, Sam Bankman-Fried. The shocking claims of falsifying balance sheets, using customers’ funds, and bribing government officials reveal a troubling picture of the company’s operations. As the trial continues, it remains to be seen how these revelations will impact the final verdict and the future of Alameda Research in the crypto industry.
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