Former Alameda CEO Admits to Using FTX Customer Deposits To Repay Loans on Risky Investments: Report
Caroline Ellison, the former CEO of Alameda Research, says the trading firm made short-term and open-term loans worth billions of dollars to pay for its venture investments.
In a transcript of her guilty plea shared by Inner City Press on Twitter, Ellison says she agreed with others to pay for the loans by borrowing from sister company FTX.
“While I was co-CEO and then CEO, I understood that Alameda had made numerous large illiquid venture investments and had lent money to Mr. Bankman-Fried and other FTX executives.
In and around June 2022, I agreed with others to borrow several billion dollars from FTX to repay those loans.”
She says she was aware that FTX would use customer funds to lend money to Alameda.
“I understood that FTX would need to use customer funds to finance its loans to Alameda…Most FTX customers did not expect that FTX would lend their digital asset holdings and fiat currency deposits to Alameda in this fashion.”
According to the former executive, Alameda had a borrowing facility on FTX that uses the funds of the trading platform’s clients.
“I understood that if Alameda’s FTX accounts had significant balances in a particular currency, it meant that Alameda was borrowing funds that FTX’s customers had deposited on the exchange.”
Ellison’s guilty plea transcript was released and docketed after former FTX CEO Sam Bankman-Fried was freed on a $250 million bail.
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The post Former Alameda CEO Admits to Using FTX Customer Deposits To Repay Loans on Risky Investments: Report appeared first on The Daily Hodl.
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Author: Rhodilee Jean Dolor
