Former Alameda CEO Confirms Firm Borrows Billions from Real FTX Client Deposits

Caroline Ellison, former chief executive officer of Alameda Research, said she was aware that the funds of the FTX fund were set aside for the company’s investments.

In a litigation memorandum in the Southern District of New York released Dec. 23, Ellison acknowledged the financial ties between FTX and Alameda, the center of a lawsuit against former FTX CEO Sam Bankman-Fried, which argues that Alameda could Access to “borrow money” via FTX from 2019 to 2022.

“I understand FTX management has implemented a special setting on Alameda’s FTX.com account that allows Alameda to maintain negative balances in various fiat and crypto currencies,” Ellison said. The agreement grants Alameda unlimited access to credit facilities without the need for collateral, interest payments on negative balances, and no margin calls or FTX.com settlement protocols.”

“If an Alameda FTX account has a negative balance in either currency This means that Alameda is borrowing funds deposited by FTX clients into the exchange.”

“I’m really sorry for what I did,” Ellison said. “I know it’s wrong.”

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