- Caroline Ellison told a judge that FTX executives secretly borrowed billions of dollars from Alameda Research.
- She and Sam Bankman-Fried hid credit lines from FTX investors and customers, she said.
- On December 19, she pleaded guilty to multiple charges carrying a maximum sentence of 110 years in prison.
Caroline Ellison said FTX executives received billions of dollars in hidden loans from Alameda Research, according to transcripts of her judicial hearings seen by Reuters.
The former Alameda CEO said he agreed with Sam Bankman-Fried to hide from FTX investors, lenders and customers that the trading platform could borrow unlimited amounts from Alameda, Reuters reported. reported.
Ellison told U.S. District Judge Ronnie Abrams in Manhattan Federal Court that “the extent of Alameda’s borrowings and certain quarterly loans that conceal the billions of dollars that Alameda has made to FTX executives and associates. I made a balance sheet,” said the agency.
Bankman-Fried’s ex-girlfriend Ellison pleaded guilty to seven counts on Dec. 19 and was sentenced to up to 110 years in prison after making a plea bargain with the Justice Department. On May 22, I unsealed the transcript of her judicial hearing.
FTX co-founder Gary Wang also pleaded guilty. A plea bargain the two struck with federal prosecutors in New York resulted in each being released on $250,000 bail. Ellison and Wang are currently cooperating with the prosecution as part of a plea bargain.
Wang said during a December 19 judicial hearing that he was instructed to change the FTX code to give Alameda special privileges on the trading platform.
Ellison agreed to waive his defense against the charges. Under her contract with the prosecutor, she also agreed to pay any damages that have not yet been determined.She will also provide documents, records, and evidence to the prosecutor and, if requested, a grand jury or I have to testify in court.
Ellison’s attorney did not immediately respond to an insider’s request for comment.
Reuters reported in November that Bankman-Fried had secretly transferred $10 billion of FTX customer funds to Alameda Research. Up to $2 billion is still missing, sources told the news agency.
Bankman-Fried told Reuters that the amount was not transferred “undercover” and that there was “misleading internal labeling”.
FTX filed for Chapter 11 bankruptcy protection after its November 11 bankruptcy, wiping out billions of dollars worth of customer deposits. Bankman-Fried stepped down as CEO on the same day.
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