Carolyn Ellison, the former CEO of Alameda Research, provided more details about the various financial crimes she committed at FTX with her ex-boyfriend, Sam Bankman-Fried, while testifying in court on Wednesday.
Besides stealing FTX clients’ money, Ellison said FTX bribed the Chinese government with $100 million to unlock a much larger pool of frozen assets.
according to summary In a report published by Inner City Press on Wednesday, Alameda resorted to bribery after alternative methods to recover the money failed.
“We tried getting a lawyer there. It didn’t work out,” Ellison said. “We used other people’s accounts. Ryan Salama told me. But it didn’t work either.”
Instead, the exchange conspired with two Chinese individuals with internal connections to the Chinese government. One individual — David Ma — told FTX executives at the time that he had a way to unfreeze their $1 billion in funds, after they had been seized as part of a money laundering investigation. Despite the objection of some, Bankman-Fried was determined to use a method.
“Sam said he found a way to unfreeze our accounts if we just sent $100 million to these cryptocurrency addresses,” Ellison explained. She said at the time she did not know who the recipient would be.
The Justice Department had initially charged Bankman-Fried with bribing Chinese government officials with $40 million. They also charged him with campaign finance violations within the United States, although both charges were later dropped in accordance with treaty obligations to the Bahamas.
Sam Bankman Fried Media Presentation
Ellison also testified that he wrote a list titled “Things That Concern Sam,” which she “frequently updated.” It included key details about some of Bankman Fried’s other motivations, including buying Snapchat, and “getting regulators to crack down on Binance.”
Ellison noted that he has investments in media site Semafor, and has considered Vox and Forbes as well.
She also noted his frequent meetings with The Big Short author Michael Lewis, whom she said was “cementing his image as an eccentric founder.” The founder’s intentionally uncombed hair and his choice to drive a Toyota Corolla were also part of the effort.
Away from the media, Ellison said Alameda made a deliberate effort to manufacture an image of stability to the trading desk’s creditors.
In June 2022, institutional cryptocurrency trading firm Genesis pulled a $400 million loan from Alameda, and also requested an updated view of Alameda’s balance sheet. At the time, the Alameda company had already secured $10 billion from FTX clients through a massive line of credit, and Bankman Fried was reluctant to reveal the truth, according to Ellison.
“I was asked to come up with alternative ways to provide information,” she said. “He wanted me to hide things on our balance sheet.”
Ellison ultimately produced seven different versions of his balance sheet for the Genesis bid, from which Bankman-Fried chose a version that did not reveal his $9.9 billion hole.
Featured image courtesy of CNBC.
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