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Alameda CEO’s Testimony Released, Admitting Collusion With FTX Sam Bankman-Fried to Defraud Billions

by Abimbola Adu
Dec 24, 2022 - 12:00 am
in Blockchain
Preferential withdrawals at FTX

On Friday, December 23, 2022, the transcript of the plea made by the former CEO of Alameda Research on December 19 was made available, with sections admitting to collusion with the former CEO of FTX, as well as other parties to defraud users of the FTX exchange of billions of dollars.

Reports show that some of the former CEO’s testimony which was previously sealed in lieu of Sam Bankman Fried’s extradition.

On December 19, Caroline Ellison, former head of embattled Alameda Research, admitted to fraudulent activities in the lawsuit filed against FTX involving two other executives, including infamous FTX boss, Sam Bankman Fried and co-founder of FTX Gary Wang, who also pleaded guilty.

It was reported that Ellison’s plea included seven counts of wire fraud and conspiracy to commit wire fraud involving both FTX and Alameda Research. Ellison has pledged cooperation with all the authorities with the hope of a reduced sentence.

The Wall Street Journal reported some of Ellison’s testimony on Friday. Ellison, 28, admitted to repaying Alameda investment loans with funds stolen from users of the FTX exchange running in the billions. 

Ellison told the court on Monday that she was sorry for her actions and knew they were wrong.

She also revealed that she worked with SBF and other executives, to doctor FTX and Alameda Research’s quarterly balance sheets to obscure the scope of Alameda’s uncollateralized debt to FTX customers.

Ellison confirmed that they knew that most FTX users and customers did not expect FTX to use their assets…in that manner.

Though the extradition of Sam Bankman Fried from the Bahamas has been completed and he has made one court appearance, the former FTX boss is currently out on bail of $250 million and placed under house arrest in the custody of his parents by order of a federal magistrate court judge. Bankman Fried has continued to deny any allegations of fraud in the FTX debacle, instead attributing FTX collapse to ‘certain mistakes.’

Customers who lost billions in assets in the FTX scandal have begun to lose all hope of recovering their support, as assets that could be claimed from FTX and Alameda Research after the seizure are not nearly enough to cover debts owed to defrauded customers.

After Ellison’s plea hearing, presiding federal court judge Abrams stepped down from handling the case due to a conflict of interest as her spouse is a partner at a firm previously retained by FTX. The case will get a new judge before the next court date.

Tags: FTX
Abimbola Adu

Abimbola Adu

Abimbola Adu is a crypto content writer with a background in English studies. She is keen on enlightening others about cryptocurrency and blockchains. She enjoys writing poems and spending time with family.

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