FTX contributor Caroline Ellison admitted during her plea deal that she hid billions of dollars in loans, according to a Dec. 23 Reuters report. As the former CEO of Alameda Research, Ellison reached an agreement with former FTX CEO Sam Bankman-Fried, allowing FTX to borrow funds from Alameda without limits. The two executives also hid this fact from investors and the general public. Alameda Research is generally considered a sister company to FTX, as Bankman-Fried founded both companies. While FTX operated as a cryptocurrency exchange, Alameda acted as a hedge fund, allowing the two companies to work together. Ellison admitted to the loan agreement in a filing before United States District Judge Ronnie Abrams in federal court in Manhattan. She said:
“We prepared quarterly statements that concealed the size of Alameda’s loan and the billions of dollars in loans Alameda had made to FTX executives and related parties.”
That admission was made as part of Ellison’s plea deal. Although his appeals hearing took place on December 19, the transcript has not been released until today, December 23. That Ellison and fellow FTX associate Gary Wang had chosen to accept a plea deal was first reported on Dec. 21. That report also indicated that the two people would cooperate in the ongoing case against Bankman-Fried. The opening of Ellison’s plea deal revealed today that he will face no punishment beyond a fine and forfeiture of assets as long as he cooperates with officials. Reports elsewhere also suggest that, at the request of the lawyers involved in the case, Judge Abrams prevented Bankman-Fried from learning of Ellison and Wang’s collaboration or else Bankman-Fried might have chosen to fight extradition. Bankman-Fried is on probation and under house arrest at her parents’ home in Palo Alto, California. His next court date is January 3, 2023.
