Collapsed Crypto Exchange FTX Allegedly Used Thai Prostitutes’ Accounts to Recover Frozen Funds
In her second day of testimony, ex-Alameda Research CEO Caroline Ellison claimed that collapsed crypto exchange FTX attempted to retrieve $1 billion worth of frozen funds by using accounts registered to Thai prostitutes. Ellison, who is the ex-girlfriend of FTX’s founder Sam Bankman-Fried and admitted to fraud related to FTX’s collapse, also accused former Alameda co-CEO Sam Trabucco of discovering the identities of the sex workers.
Alameda’s Frozen Funds and Failed Unfreezing Attempts
Ellison revealed that Alameda, a failed crypto trading firm accused of borrowing customer funds, frequently used accounts on other crypto exchanges. The Chinese government froze Alameda’s funds as part of a separate money laundering investigation. Despite hiring a lawyer in China to unfreeze the funds, their efforts were unsuccessful.
Desperate Measures: Sending Crypto Assets to Chinese Officials
When conventional methods failed, Ellison claimed that the FTX team decided to send approximately $150 million in crypto assets to wallets believed to belong to Chinese officials. However, she used coded language when reporting this action to Bankman-Fried.
The Trial and Allegations Against Bankman-Fried
Caroline Ellison is a key witness in Bankman-Fried’s trial. She previously accused him of instructing her to engage in illegal activities. Bankman-Fried was arrested following FTX’s bankruptcy filing in November 2022. Prosecutors now claim that he mismanaged the company, leading to seven criminal charges against him. The trial is expected to last six weeks.
Hot Take: The Bizarre Tactics Used by FTX Raise Concerns about Ethical Practices
The shocking revelation that FTX allegedly resorted to using Thai prostitutes’ accounts in an attempt to recover frozen funds highlights the lengths some crypto businesses are willing to go to protect their assets. This case not only exposes potential corruption within the industry but also raises questions about ethical practices and accountability. It serves as a reminder of the importance of regulatory oversight and the need for transparency in the crypto world.
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