Alameda Research CEO Carolyn Ellison allegedly paid herself millions of dollars in a single bonus payment despite knowing of the massive holes in FTX’s finances.
Months before FTX filed for bankruptcy, it allegedly moved money between different accounts until it reached its own account.
Cryptocurrency exchange FTX exploded spectacularly late last year, which led to the decline of Alameda Research, its trading subsidiary.
Alameda itself was Losing huge amounts of money Thanks to high stakes bets, with FTX accused of Secretly redirecting its users’ funds to the sister company to help make up for its losses.
Legal proceedings launched in the aftermath of FTX’s downfall have accused its top executives Gross mismanagementincluding founder and CEO Sam Bankman-Fried (widely known as “SBF”).
In December, Ellison herself He pleaded guilty to seven countsincluding electronic fraud and money laundering.
Millions of dollars reward
Shortly after the FTX crash, it was reported that she and the SBF knew about red flags on the cryptocurrency exchange three months before it crashed.
according to new legal depositHowever, Ellison learned of major holes in FTX’s finances eight months before the company’s cash flow problems were made public – and rather than act on the problem, she made a series of complex transactions to pay herself a multimillion-dollar reward.
FTX’s most recent lawsuit against SBF and its senior partners — filed Thursday — alleges that as early as March 2022, Ellison estimated that FTX had a cash shortfall of more than $10 billion.
The estimate, which she kept to her private notes, came just weeks after she transferred $22.5 million from Alameda into her personal FTX account via a series of transactions through other accounts.
On March 29, she allegedly transferred $10 million of that alleged “bonus” into her personal bank account, using the money to invest in an unnamed safety and research firm.
In the lawsuit, the money was classified as “embezzled debtor’s money”.
Ellison’s attorneys were not available for comment when contacted luck.
It was also alleged that on separate occasions between 2021 and 2022, Ellison misused company funds to award herself with millions of dollars in other bonuses.
“A ‘bounty’ cannot be justified given Ellison’s extensive misconduct,” said the complaint filed Thursday.
Eight months after Ellison’s main bonus payout, FTX Voluntary Chapter 11 proceedings have begun in the United States.
The bankruptcy filing came after Ellison’s ex-boyfriend SBF scrambled publicly– and failed – to raise emergency funds to fill the company’s financial gaps.
Until the company’s downfall, Bankman-Fried was widely respected, having cultivated his image as a philanthropist and entrepreneur, drawing comparisons to the likes of Warren Buffett. However, the demise of FTX 48 Hours left its reputation in tatters.
SBF took a massive personal financial hit from the company’s collapse, wiping out his $16 billion fortune, According to Bloombergmarking one of the greatest destruction of wealth in history.
At the peak of his wealth, he was 31 years old worth $26 billion.
Ellison found the CEO’s role ‘overwhelming’
Ellison — who was just 28 years old when FTX and Alameda imploded — has also amassed a massive fortune during her tenure at the helm of Alameda.
According to FTX bankruptcy filings, she said Received 6 million dollars in payments and loans over the lifetime of the collapsed cryptocurrency exchange, and her net worth was reported to have reached $15 million by the time the company collapsed.
However, it became clear Thursday that Ellison doesn’t have much confidence in her ability to run the company.
She said in one of the notes she saw the The New York Times.
“I was feeling so sad and overwhelmed with my work,” she added. “At the end of the day, I can’t wait to go home, turn off my phone, have a drink, and just get away from it all.”
At a hearing in December, Ellison told the judge that she “knows (what she did) was wrong.”
When asked if she knew her actions were illegal, Ellison replied, “Yes.”
Before pleading guilty and agreeing to cooperate with authorities, Ellison was It said She faces a sentence of 110 years in prison for her crimes.
Legal proceedings are still ongoing.