Caroline Ellison: Secret recording offers trove of explosive revelations
The ongoing trial of former FTX CEO Sam Bankman-Fried has uncovered a series of explosive revelations in the form of testimonies from former key FTX and Alameda Research executives.
The latest court proceedings on Oct. 12 saw former Alameda CEO Caroline Ellison testify for the third day, following which the jury was presented with a recording of a meeting she held with Alameda staffers on Nov. 9, 2022, just days before the collapse of the FTX empire.
The meeting, held in Hong Kong and joined by nearly half of Alameda’s employees, was the key moment Ellison came clean about the ongoing scenario with the crypto exchange to her colleagues. This admission was accompanied by explosive revelations about Alameda’s financial relationship with FTX. Cointelegraph has obtained access to the secret recording, and we have curated a list of four striking elements it revealed.
The first and most crucial revelation came early in the meeting when Ellison revealed that Alameda had borrowed money from FTX for a year. She admitted that Alameda had made several illiquid investments using the borrowed funds.
Due to the market downturn, Alameda’s loan positions were called in, creating a shortfall in FTX’s balance sheet. Here’s an excerpt from the discussion:
Ellison revealed that Alameda’s bad loans created market panic around FTX, causing users to withdraw their funds. FTX then paused withdrawals to contain the situation, and the exchange came crashing down within days.
When one of the employees attending the meeting asked Ellison how FTX intended to pay back its customers, Ellison said that the crypto exchange was planning to raise further funds to fill the gap.
During the court proceedings on Thursday, Christian Drappi, a former software
Read more on cointelegraph.com
