Alameda Caroline Ellison’s Plea Deal

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aroline Ellison has confessed to hiding billions of dollars' worth of FTX loans from the public, a move instigated by Alameda Research CEO when they crafted an unrestricted borrowing agreement with FTX.

 

During her plea deal, FTX associate Caroline Ellison confessed to hiding billions of dollars in loans, as reported by Reuters on Dec. 23.

In a clandestine agreement, Ellison of Alameda Research and Bankman-Fried of FTX arranged for unlimited loans from the former to the latter without disclosing any information about it to shareholders or outsiders.

Bankman-Fried, the founder of both Alameda Research and FTX, formed a closely knit relationship between the two firms. While FTX provided cryptocurrency trading services to its clients, Alameda focused on serving as a hedge fund. Together they created an integrated financial powerhouse.

In a statement to U.S. District Judge Ronnie Abrams in Manhattan federal court, Ellison confessed to the lending agreement she had made. She proclaimed:

“We prepared certain quarterly balance sheets that concealed the extent of Alameda’s borrowing and the billions of dollars in loans that Alameda had made to FTX executives and to related parties.”

Ellison's confession was divulged as part of her plea agreement, though the proceedings were kept sealed until December 23rd despite taking place four days prior on the 19th.

On December 21st, news broke that Ellison and Gary Wang had agreed to a plea deal in order to assist the active legal investigation against Bankman-Fried. This marked an important development in the case and signalled their dedication towards aiding justice. 

With the unsealing of Ellison's plea deal, it is now known that she will be free from any other punishments beyond a fee and asset forfeiture as long as she keeps collaborating with authorities. 

According to external accounts, Judge Abrams put a protective order in place at the request of lawyers associated with this situation, barring Bankman-Fried from obtaining knowledge related to Ellison and Wang's collaborative effort. Without possessing this information, it is likely that Bankman-Fried would have chosen not to challenge extradition proceedings.

Presently, Bankman-Fried is confined to his parents' residence in Palo Alto, California due to bail conditions. He will return for a court hearing on January 3rd of 2023.

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