Recent court documents filed in US District Court in southern New York have stated that former CEO of Alameda Research Caroline Ellison blamed former CEO of FTX Sam Bankman-Fried for the collapse of the FTX crypto exchange. In a secret recording by an Alameda Research employee Ellison, who is the former girlfriend of Bankman-Fried, says that he made the decision to use the crypto exchange’s funds to prop the hedge fund.
Days before FTX cryptocurrency exchange collapsed, the then CEO of hedge fund Alameda Research Caroline Ellison convened a meeting with employees to discuss the “general overview of the situation.” She said that she wanted to say “sorry” as the future seemed bleak.
She reportedly told her employees, “I think my current default plan is that Alameda will likely wind down once we can, like, repay all our creditors and sort of wind down a bunch of our like, whatever remaining obligations we have.”
According to the court documents filed, an employee from Alameda questioned Caroline Ellison, “Who made the decision on using [FTX] user deposits?”
Ellison responded “Um…Sam, I guess.”
A recent court filing on Monday said that Caroline Ellison also kept a memo that was titled “Things Sam is Freaking About.” Federal prosecutors are planning to use the contents of the memo as evidence at the trial of Sam Bankman-Fried that is scheduled for October 2, 2023.
Caroline Ellison, the former CEO of Alameda Research pleaded guilty to wire fraud and money laundering charges. She has been cooperating with the federal authorities and is expected to testify against Sam Bankman-Fried. Two other senior executives Gary Wang and Nishad Singh also pleaded guilty to criminal charges, while Sam Bankman-Fried pleaded not guilty.
As reported by us earlier, Sam Bankman-Fried was sent to jail by judge Lewis Kaplan after he was found guilty of witness tampering. He is currently lodged at the Metropolitan Detention Center in Brooklyn. This jail also housed the likes of convicted sex trafficker Ghislaine Maxwell, convicted sex offender R. Kelly and “pharma bro” Martin Shkreli.
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