May 23, 2024

Solid State Lighting Design

Find latest world news and headlines today based on politics, crime, entertainment, sports, lifestyle, technology and many more

Former Alameda CEO Says Bankman-Fried, FTX Executives Received Billions of Dollars in Hidden Loans

Former Alameda CEO Says Bankman-Fried, FTX Executives Received Billions of Dollars in Hidden Loans

NEW YORK (Reuters) – The former hedge fund chief told a judge that Sam Bankman-Fried and other FTX executives received billions of dollars in secret loans from cryptocurrency firm Alameda Research when it pleaded guilty to its role in the stock market crash. .

Carolyn Ellison, the former CEO of Alameda Research, said she and Bankman-Fried agreed to hide from FTX investors, lenders and clients that a hedge fund could borrow unlimited amounts from the exchange, according to a transcript of her Dec. 19 confirmation hearing that was the opening day. Friday.

“We prepared certain quarterly budgets that hid the size of Alameda’s borrowing and the billions of dollars in loans Alameda made to FTX executives and related parties,” Ellison told US District Judge Ronnie Abrams in Manhattan federal court. .

Both Ellison and FTX co-founder Gary Wang have pleaded guilty and are cooperating with prosecutors as part of their plea agreements. Their sworn statements provide a preview of how two of Bankman-Fried’s former associates may have testified at the trial against him as prosecution witnesses.

In a separate hearing, also on December 19, Wang said he was directed to make changes to the FTX token to give Alameda special privileges on the trading platform, recognizing that others are telling investors and clients that Alameda has no such privileges.

Wang did not specify who gave him those directions.

Attorney General Nicholas Ross said in court Thursday that Bankman-Fried’s trial will include evidence from “multiple cooperating witnesses.” Ross said Bankman-Fred executed a “fraud of epic proportions” that resulted in the loss of billions of dollars in client and investor money.

See also  European markets advance supported by inflation data; Stoxx 600 up 1%

Bankman-Fried acknowledged the failure of risk management at FTX but said he did not believe he had criminal liability. Not yet entered into an appeal.

Bankman-Fried founded FTX in 2019 and has skyrocketed the values ​​of Bitcoin and other digital assets to become a multi-billionaire several times over as well as an influential donor to US political campaigns.

A wave of customer withdrawals in early November amid concerns about FTX funds being mixed with Alameda prompted FTX to declare bankruptcy on November 11.

Bankman Fried, 30, was released on Thursday on $250 million bail. His spokesperson declined to comment on Ellison and Wang’s remarks.

Lawyers for Wang and Ellison declined to comment.

Ellison told the court that when investors called back in June 2022 the loans they made to Alameda, she agreed with others to borrow billions of dollars of FTX clients’ money to pay them back, knowing that the clients were unaware of the arrangement.

“I’m really sorry for what I did,” Ellison said, adding that she is helping to recover clients’ assets.

Wang also said he knew what he was doing was wrong.

Court records showed that Ellison’s court transcripts were initially closed out of fear that revelations of her cooperation might thwart prosecutors’ efforts to extradite Bankman-Fried from the Bahamas, where he lived and where FTX is headquartered.

Bankman Fried was arrested in the capital, Nassau, on Dec. 12 and arrived in the United States on Wednesday after his extradition was approved.

A judge ordered him confined to his parents’ home in California until trial.

See also  A federal judge is blocking a White House plan to limit credit card late fees

(Reporting by Luke Cohen in New York) Written by Tom Hales in Wilmington, Del. Editing by Noelene Walder and Matthew Lewis

Our standards: Thomson Reuters Trust Principles.