Former Alameda Research CEO Caroline Ellison said that she and FTX co-founder Sam Bankman-Freed were well aware of the intricacies of Alameda’s FTX lending.
During a public hearing in federal court in Manhattan, Caroline Ellison said she understood the wrongness and illegality of her actions. Sam Bankman-Fried has previously stated on multiple occasions that he was unaware of the significant cash gap caused by Alameda’s lending. But Allison completely denied his words:
“I knew that from 2019 to 2022, Alameda had access to the FTX line of credit. In practice, this arrangement allowed Alameda to leverage indefinitely, without the need for collateral, negative balances, and margin requirements on FTX.com’s liquidation protocols,” said Alameda’s former CEO.
In effect, Alameda could use FTX’s liquidity indefinitely, which was backed by user and creditor funds. According to FTX co-founder Gary Wan, he was tasked with changing the site code to give the Alameda platform special privileges. He acknowledged that he was aware of the illegality of his actions.
Allison and Wang had previously pleaded guilty to fraud. They face up to 110 and 50 years in prison, respectively.
Source: Bits
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