Menu

Caroline Ellison Apologizes for Misconduct in FTX Collapse

Funviralpark 2 years ago 0 10

Caroline Ellison, an aide to FTX founder Sam Bankman-Fried, pleaded guilty to fraud and other crimes in court this week, telling a judge that she and others are doomed to the cryptocurrency exchange. apologized for colluding to steal billions of dollars from its customers. Misleading investors and lenders.

Ellison, the former CEO of Bankman-Fried’s cryptocurrency trading firm Alameda Research, said in New York federal court that he was “really sorry for what he did,” according to the hearing transcript, which has been made public. I don’t think so,” he said. Friday. “I knew it was wrong.”

Ellison, 28, and former FTX chief technology officer Gary Wang, 29, pleaded guilty Monday in separate hearings held in closed court. Both agreed to cooperate with the government’s investigation in exchange for a reduced sentence.

Bankman-Fried’s former romantic partner, Ellison, pleaded guilty to seven counts, including fraud, conspiracy and money laundering. At her hearing, she admitted to using billions of dollars from her FTX client accounts to conspire to pay off loans Alameda took to make risky investments.

FTX executives enacted a special setup that allowed Alameda access to an unlimited line of credit without having to post collateral, pay interest on negative balances or be subject to margin calls, she said. said.

“We also understand that many FTX customers have invested in crypto derivatives and most FTX customers did not anticipate lending their digital assets and fiat deposits held by FTX to Alameda in this way. she said.

Ellison also said that she and Bankman-Fried were not aware of the scope of Alameda’s borrowings and that the company was an executive at FTX and Associates. Bankman-Fried was one of the executives who took the loan from Alameda, she said.

When questioned by a judge, Ellison said he knew what he was doing was illegal.

She said that since the FTX implosion, she has worked hard to help customers recover their assets and aid government investigations.

At the hearing, District Judge Ronnie Abrams granted federal prosecutors’ requests to temporarily seal all documents related to Ms. Ellison’s plea bargain. At the time, Bankman-Fried was in a prison in the Bahamas after the Department of Justice called for local police to arrest him, but he had yet to formally agree to be transferred to U.S. custody.

“We are still hopeful that extradition is imminent, but given that he has not yet agreed, it is our intention to extradite Mr. Ellison if his cooperation becomes apparent at this point. We believe that the objectives of law enforcement may be thwarted,” he told Judge Daniel Sassoon, Assistant U.S. Attorney Abrams.

A lawyer for Ellison declined to comment. Ms. Ellison said at her judicial hearing she was ordered released on a bond of $250,000. A spokesman for the federal attorney’s office in Manhattan declined to comment.

FTX’s new CEO, John J. Ray III, testified before a House committee on Tuesday about the collapse of the cryptocurrency exchange. His testimony came less than a day after company founder Sam Bankman-Fried was arrested in the Bahamas.Photo: Al Drago/Bloomberg News

Mr. Wang pleaded guilty before the same judge. He told Judge Abrams that he knew what he was doing was illegal and wrong. I was instructed to do so, and I agreed to it,” he said, adding that he implemented the change knowing it would give Alameda Research special privileges on the FTX platform.

A lawyer for Wang declined to comment. He has previously said Wang takes his responsibilities as a co-witness seriously.

Earlier this month, the Justice Department indicted Bankman-Fried on eight counts of fraud and conspiracy related to the bankruptcy of his company. He was released from custody Thursday on $250 million bail after appearing in court for the first time in New York after being extradited from the Bahamas. , imposed severe restrictions on Bankman-Fried, including ordering him to be placed under electronic surveillance.

Bankman-Fried says he made mistakes that contributed to the demise of FTX, but denies any involvement in the fraudulent activity.

Please contact Corinne Ramey ([email protected]) and James Fanelli ([email protected]).

Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdb8

– Advertisement – BuzzMag Ad
Written By

Leave a Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

– Advertisement – BuzzMag Ad