Caroline Allison, the former chief executive officer of Alameda Research, told staff members that the trading firm was using FTX customer funds on Nov. 9, 2022, according to an audio recording of an all-hands meeting in Hong Kong obtained by Cointelegraph.
See related article: Little-known FTX co-founder Gary Wang testifies in Sam Bankman-Fried trial
Fast Facts
- “We ended up like borrowing a bunch of funds from FTX, which led to FTX having a shortfall in user funds,” Ellison reportedly said to about 15 staff members in the recording.
- “[FTX] basically always allowed Alameda to borrow users’ funds,” Ellison reportedly said, adding that the customer funds came from both FTX and FTX.US.
- In the recording, former Alameda software engineer, Christian Drappi, reportedly asked Ellison about when she learned about the misuse of customer funds, but Ellison didn’t reply.
- Drappi testified on Thursday in the ongoing criminal trial of Sam Bankman-Fried, following three days of testimony from Ellison. He said Alameda employees had no idea of the company’s use of FTX customer deposits prior to the date of the recording.
- Gary Wang, co-founder and former chief technology officer of FTX, testified last Friday. Wang said Alameda had a US$65 billion special credit line to FTX, that would allow the hedge fund to borrow a virtually unlimited amount of customer funds.
- FTX filed for bankruptcy in the U.S. on Nov. 11, 2022. Bankman-Fried, the co-founder and former chief executive officer of the exchange has been charged with seven counts of wire fraud and money laundering. His trial began on Oct. 4.
See related article: Crypto trust on trial: Bankman-Fried faces judgment
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- Source: https://forkast.news/caroline-ellison-told-alameda-research-ftx-user-deposits-last-november-cointelegraph/
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