2023-10-15 09:35:01
In the midst of negotiations related to the FTX crypto exchange, an audio recording of a meeting of Alameda Research was leaked, from which we can learn interesting things about the company’s deceptive operation. The audio, which can already be heard on SoundCloud, was posted by a reporter and quickly went viral on social media. From this we learn that Caroline Ellison, the former CEO of Alameda Research, told employees about the misuse of client funds in a meeting before the Alameda collapse. Alameda Research allegedly misappropriated billions of dollars of FTX client money for high-risk investments and to manage Alameda’s loans. The former CEO previously testified against former FTX CEO Sam Bankman-Fried. Ellison, who pleaded guilty to siphoning billions from FTX users to benefit Alameda, alleged that Bankman-Fried created the systems that facilitated these transactions. He also admitted that he sent statements that painted a picture of Alameda that was less risky than it actually was. Overall, this contributed to a misjudgment of the company’s financial position. Ellison further testified that his company received between $10 billion and $20 billion from FTX and other companies. It also spent about $2 billion on loan repayments, investments, and stablecoin conversions. He then used the remaining funds for his company’s own purposes and other activities. Ellison’s testimony is consistent with that of FTX co-founder and former CTO Gary Wang. Wang described such an unlimited borrowing policy. This allowed Alameda to withdraw unlimited amounts of money from the stock market. Caroline previously said that her ex-partner forced her to con people. He and Gary Wang both pleaded guilty to charges related to the December 2022 crash of the crypto exchange. In contrast, Bankman-Fried maintained her innocence.
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