Caroline Ellison, former chief executive of trading firm Alameda Research, told a federal judge last week that she agreed with executives of FTX, including former CEO Sam Bankman-Fried, to mislead lenders and customers on how much Alameda was borrowing from the now-bankrupt exchange.

See related article: U.S. authorities say two FTX, Alameda executives have pleaded guilty to fraud

Fast facts

  • In a transcript of a Monday hearing unsealed on Friday, Ellison said that she knew “it was wrong” and that she was aware that Alameda was given access to a borrowing facility on from 2019 through 2022.
  • “We prepared certain quarterly balance sheets that concealed the extent of Alameda’s borrowing and the billions of dollars in loans that Alameda had made to FTX executives and to related parties,” Ellison, who has pleaded guilty to fraud charges surrounding the collapse of FTX, said.
  • FTX cofounder Gary Wang joined Ellison in pleading guilty to fraud. Both key figures of the Bankman-Fried empire are cooperating with prosecutors’ investigations into the exchange’s collapse.
  • Bankman-Fried is facing multiple criminal charges and was extradited from the Bahamas last week. He was released on Thursday through a US$250 million bail package, which prosecutor Nicolas Roos called the “largest ever pretrial bond.”

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