Alameda Research's ex-CEO states FTX founder Sam Bankman-Fried knowingly misled investors since 2019
|- Alameda Research, according to former CEO Caroline Ellison, had access to customer deposits for the last three years.
- FTX ex-CEO Sam Bankman-Fried facilitated the service with the help of ex-CTO Gary Wang.
- Earlier this week, Ellison and Wang pleaded guilty to fraud charges after Bankman-Fried was arrested and extradited to the United States.
The FTX saga continues with the former CEO of Alameda Research revealing more secrets, worsening the situation for Sam Bankman-Fried. By the looks of it, FTX's co-founder might end up facing many more charges with the discovery of intentional commingling of funds.
Alameda Research ex-CEO vs. FTX ex-CEO
The former head of FTX's sister company Alameda Research, Caroline Ellison, brought forward new allegations against the bankrupt exchange's founder Sam Bankman-Fried. According to Ellison, Bankman-Fried was aware of and facilitated the comingling of customer funds.
During a plea hearing on December 19 in a Manhattan federal court, Ellison stated that she was aware of Alameda and FTX's wrongdoings. She said Alameda Research had access to funding from FTX from 2019 until the exchange's bankruptcy. Ellison iterated,
"In practical terms, this arrangement permitted Alameda access to an unlimited line of credit without being required to post collateral, without having negative balances and without being subject to margin calls on FTX.com's liquidation protocols."
Ellison added that Bankman-Fried knew the arrangement, and both executives concealed the deal from lenders. To hide the amount of Alameda's borrowing, false financial statements and fake loans to FTX executives were created.
FTX founders give up
Earlier this week, FTX co-founders Bankman-Fried and Wang both fell to their knees in front of law enforcement. The former was arrested and extradited to the United States and was released on a $250 million bail last week.
Ellison and Wang, on the other hand, pleaded guilty to the fraud charges. Although the specifics of the charges were not announced, Ellison has been alleged of manipulating the price of FTX's token, FTT.
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