Alameda could borrow unlimited amount of customer funds from FTX

Alameda could borrow unlimited amount of customer funds from FTX

December 24, 2022

By Priya NV

Former Alameda CEO discloses details that led to the collapse of FTX during a plea hearing
Caroline Ellison admitted that Alameda had given billions of dollars in loans to SBF and other FTX executives

The ongoing legal case against Sam Bankman-Fried is spilling more details on the business operations at FTX. The latest report by Reuters reveals that Alameda Research could borrow unlimited money from FTX. Moreover, the former FTX CEO – SBF – and former Alameda CEO – Caroline Ellison – agreed to hide this fact from lenders, investors, and customers.

The detail comes from the court hearing of Caroline Ellison, which took place on December 19, 2022. The court hearing transcript was unsealed today, i.e., December 23, 2022. The document was sealed over fears of it hampering Bankman-Fried extradition from the Bahamas.

Alameda’s former CEO spills the tea

During her plea hearing, Ellison also stated that Alameda gave FTX’s executives, including SBF, billions of dollars in secret loans. In addition, the former executive stated that their quarterly balance sheets “concealed” Alameda’s borrowings and secret loans to FTX executives and other parties.