FTX distributed money to customers in form of loan
2022.12.24 12:31
FTX distributed money to customers in form of loan
Budrigannews.com – Caroline Ellison, the previous CEO of Alameda Exploration, said as a component of her request bargain that she knew FTX reserves had been made accessible for the funding company’s ventures.
Ellison acknowledged the financial ties between FTX and Alameda that were at the center of prosecutors’ case against former FTX CEO Sam Bankman-Fried in a transcript of the proceedings for her plea deal in the Southern District of New York that was made public on December 23. From 2019 to 2022, Alameda had access to a “borrowing facility” through FTX, according to the former CEO.
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“I comprehended that FTX leaders had carried out extraordinary settings on Alameda’s FTX.com account that allowed Alameda to keep up with negative adjusts in different government issued types of money and digital currencies,” said Ellison. ” Practically, this arrangement allowed Alameda to access a limitless credit line without having to put up collateral, without having to pay interest on unpaid balances, and without having to worry about margin calls or FTX.com’s liquidation procedures. She added,
“If Alameda’s FTX accounts had significant negative balances in a particular currency, it meant that Alameda was borrowing funds that FTX’s customers had deposited onto the exchange.”
OK – on #FTX / Alameda, here now the unsealed guilty plea transcript of Caroline Ellison – it was held in secret, and not docketed until today, once Bankman-Fried was freed on $250 mln bond. Thread then stories on and pic.twitter.com/Ptd0L1u9oL
— Inner City Press (@innercitypress) December 23, 2022
Among the claims made in Ellison’s statement were that Bankman-Fried and other FTX executives had borrowed money from Alameda and used that money to pay back “loans worth several billion dollars.” She stated that the majority of FTX customers would have anticipated that their funds would be used for this purpose, and she and Bankman-Fried approved “materially misleading financial statements” for Alameda lenders despite being aware that doing so was against the law.
Ellison said, “I am truly sorry for what I did.” I knew it wasn’t right.
The former Alameda CEO was largely spared from many of the charges Bankman-Fried is currently facing, including securities fraud and wire fraud, by Ellison’s plea deal, which was announced on December 21. She could still face criminal tax violations charges, but the agreement stipulated that she surrender all travel documents in exchange for $250,000 bail.
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After spending more than a week in the Bahamas’ Fox Hill Prison, Bankman-Fried was extradited to the United States on December 21. After his parents posted a $250 million bond, the prosecution granted the former FTX CEO home detention with an ankle bracelet. On January 5, he is expected to appear in court once more.
