Caroline Ellison, the former CEO of Alameda Research, admitted in court in New York that she lied to lenders about how much money her company was borrowing from the failed FTX crypto exchange.
Ellison knew that her actions were wrong and agreed with the former CEO of FTX, Sam Bankman-Fried, to create false financial statements to hide the borrowing arrangement.
“From 2019 through 2022, I was aware that Alameda was provided access to a borrowing facility on FTX.com, the cryptocurrency exchange run by Mr. Bankman-Fried,” Ellison said, according to the transcript cited by Bloomberg. “In practical terms, this arrangement permitted Alameda access to an unlimited line of credit without being required to post collateral, without having negative balances and without being subject to margin calls on FTX.com’s liquidation protocols.”
Ellison and the former CTO of FTX, Gary Wang, pleaded guilty to multiple charges related to the collapse of their companies.
Bankman-Fried was brought to the United States from the Bahamas and was released on a $250 million bond while he waits for trial.