FTX’s disgraced CEO Sam Bankman Fried (SBF) was extradited to the U.S. Wednesday from the Bahamas. On Thursday he appeared in a U.S District Court in New York. His parents paid the $250 million dollar bond for his release.

Two of SBF’s partners have flipped and are cooperating with authorities investigating what happened at the company. One of those partners is 28-year-old Caroline Ellison who is SBF’s former girlfriend.

Caroline Ellison

Ellison ran his investment company, Alameda Research. Reportedly Ellison had ‘unlimited’ access to FTX’s clients money. She has plead guilty to fraud, admitting that she agreed with SBF and gave ‘materially misleading financial statements’ in order hide information.
She also acknowledged that she kew her actions were illegal.

Ellison has worked out a plea deal to lessen her sentence. She will help build a case against SBF who may face over 100 yr prison sentence. She admitted that she was aware that Alameda was using customer money inappropriately, saying:

‘I was aware that Alameda was provided access to a borrowing facility on FTX.com, the cryptocurrency exchange run by Mr. Bankman-Fried.

‘I understood that FTX executives had implemented special settings on Alameda’s FTX.com account that permitted Alameda to maintain negative balances in various fiat currencies and crypto currencies.

‘In practical terms, this arrangement permitted Alameda access to an unlimited line of credit without being required to post collateral, without having to pay interest on negative balances and without being subject to margin calls or FTX.com’s liquidation protocols.

‘I understood that if Alameda’s FTX accounts had significant negative balances in any particular currency, it meant that Alameda was borrowing funds that FTX’s customers had deposited onto the exchange.’

‘I was aware that Alameda was provided access to a borrowing facility on FTX.com, the cryptocurrency exchange run by Mr. Bankman-Fried.

‘I understood that FTX executives had implemented special settings on Alameda’s FTX.com account that permitted Alameda to maintain negative balances in various fiat currencies and crypto currencies.

‘In practical terms, this arrangement permitted Alameda access to an unlimited line of credit without being required to post collateral, without having to pay interest on negative balances and without being subject to margin calls or FTX.com’s liquidation protocols.

‘I understood that if Alameda’s FTX accounts had significant negative balances in any particular currency, it meant

She apologized, and said she accepted the blame for what she did and admitted she was guilty. She also expressed a desire to help recover funds for customers who had lost money saying,

‘I am truly sorry for what I did. I knew that it was wrong. And I want to apologize for my actions to the affected customers of FTX, lenders to Alameda and investors in FTX.

‘Since FTX and Alameda collapsed in November 2022, I have worked hard to assist with the recovery of assets for the benefit of customers and to cooperate with the government’s investigation.

‘I am here today to accept responsibility for my actions by pleading guilty.’

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SBF is currently under house arrest at his parents home, and others who worked with him have been warned that there is a small window to come clean on their part in the scandal.

 

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