Ex-Alameda CEO Caroline Ellison says she and Sam Bankman-Fried misled FTX investors in lawsuit

Former Alameda Research CEO Caroline Ellison said she and FTX co-founder Sam Bankman-Fried misled lenders about how much the company borrowed from the cryptocurrency exchange.

Ellison disclosed her actions in a Dec. 19 trial in federal court in Manhattan, Bloomberg reported.

“I am truly sorry for what I did. I knew it was wrong,” she said, according to a transcript of the hearing in which she acknowledged the financial ties between her company and FTX.

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Alameda Research CEO Caroline Ellison

Alameda Research CEO Caroline Ellison reportedly admitted to deliberately misleading lenders about the company’s financial ties to FTX. (Twitter @carolinecapital / Fox News)

“From 2019 to 2022, I was aware that Alameda was being granted access to a loan facility on FTX.com, the cryptocurrency exchange operated by Mr. Bankman-Fried,” Ellison said. “In practical terms, this arrangement allowed Alameda to access an unlimited line of credit without having to post collateral, without having negative balances and without being subject to margin requirements on FTX.com’s liquidation protocols.”

Bankman-Fried, 30, the disgraced founder of crypto exchange, faces multiple charges from the Southern District of New York and the Securities and Exchange Commission.

The charges include conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to defraud the Federal Election Commission and commit campaign finance violations.

He was released Thursday on a $250 million bond following his arrest in the Bahamas earlier this month.

FTX Sam Bankman-Fried Court

Sam Bankman-Fried leaves Federal Court in New York City on Thursday, December 22, 2022. The former CEO of FTX and Alameda has been released on $250 million bail. (Charles Guerin/Abaca for Fox News Digital / Fox News)

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Federal prosecutors said he used millions of dollars in client funds to finance a lavish lifestyle through Alameda.

Ellison said that “if Alameda’s FTX accounts had significant negative balances in a particular currency, it meant that Alameda was borrowing funds that FTX’s customers had deposited into the exchange,” the Bloomberg report said.

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