{"id":173596,"date":"2023-10-13T17:12:24","date_gmt":"2023-10-13T11:42:24","guid":{"rendered":"https:\/\/dripp.zone\/news\/?p=173596"},"modified":"2023-10-13T17:12:24","modified_gmt":"2023-10-13T11:42:24","slug":"secret-recording-offers-trove-of-explosive-revelations-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/secret-recording-offers-trove-of-explosive-revelations-crypto-news\/","title":{"rendered":"Secret recording offers trove of explosive revelations – Crypto News"},"content":{"rendered":"
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The ongoing trial of former FTX CEO Sam Bankman-Fried has uncovered a series of explosive revelations in the form of testimonies from former key FTX and Alameda Research executives.\u00a0<\/p>\n

The latest court proceedings on Oct. 12 saw former Alameda CEO Caroline Ellison testify for the third day, following which the jury was presented with a recording of a meeting she held with Alameda staffers on Nov. 9, 2022, just days before the collapse of the FTX empire.<\/p>\n

The meeting, held in Hong Kong and joined by nearly half of Alameda\u2019s employees, was the key moment Ellison came clean about the ongoing scenario with the crypto exchange to her colleagues. This admission was accompanied by explosive revelations about Alameda\u2019s financial relationship with FTX. Cointelegraph has obtained access to the secret recording, and we have curated a list of four striking elements it revealed.<\/p>\n

Alameda\u2019s bad investments led to the financial crisis at FTX <\/h2>\n

The first and most crucial revelation came early in the meeting when Ellison revealed that Alameda had borrowed money from FTX for a year. She admitted that Alameda had made several illiquid investments using the borrowed funds. <\/p>\n

Due to the market downturn, Alameda\u2019s loan positions were called in, creating a shortfall in FTX\u2019s balance sheet. Here\u2019s an excerpt from the discussion:<\/p>\n

\u201cMost of Alameda\u2019s loans got called in in order to meet those loan recalls. We ended up borrowing a bunch of funds on FTX, which led to FTX having a shortfall in user funds. And so with the, once there started being like FUD about this and users started withdrawing funds.\u201d <\/p><\/blockquote>\n

Ellison revealed that Alameda\u2019s bad loans created market panic around FTX, causing users to withdraw their funds. FTX then paused withdrawals to contain the situation, and the exchange came crashing down within days. <\/p>\n

FTX planned to raise more funds to compensate users<\/h2>\n

When one of the employees attending the meeting asked Ellison how FTX intended to pay back its customers, Ellison said that the crypto exchange was planning to raise further funds to fill the gap.<\/p>\n

\u201cBasically, FTX is trying to raise in order to do this [compensate users], but yeah, after the crash, no one wanted to invest. I don\u2019t know, obviously, in retrospect, the plan of waiting around for several months and like for the market environment to get better and then raise.\u201d<\/p><\/blockquote>\n

During the court proceedings on Thursday, Christian Drappi, a former software engineer at Alameda who was present during the meeting, told the court that Ellision\u2019s response about paying back customers sounded concerning to him because he wasn\u2019t aware of a scenario where investors have contributed to making customers whole due to bad financial decisions of the company.<\/p>\n

The nervous laughter<\/h2>\n

As the secret recording was played in the court, the former Alameda employee also pointed out that Ellison had giggled during the meeting. The employee suggested this was Ellison\u2019s \u201cnervous laughter,\u201d something she often did when in a tight spot.<\/p>\n

Related: <\/em><\/strong>Changpeng Zhao\u2019s tweet \u2018contributed\u2019 to collapse of FTX, claims Caroline Ellison<\/em><\/strong><\/a><\/p>\n

When Ellison was asked by a staffer at the meeting whose idea it was to plug Alameda\u2019s loan losses with FTX customer money, she responded with, \u201cUm, Sam, I guess,\u201d and giggled.<\/p>\n

Alameda almost always had access to user\u2019s funds at FTX<\/h2>\n

Another staffer enquired about the backdoor access of Alameda to FTX and asked how long Alameda had been using FTX customers\u2019 funds to bridge holes in its balance sheet. Ellison responded, \u201cFTX basically always allowed Alameda to borrow user funds, as far as I know.\u201d <\/p>\n

Collect this article as an NFT<\/strong><\/a> to preserve this moment in history and show your support for independent journalism in the crypto space.<\/em><\/p>\n

Magazine: How to protect your crypto in a volatile market \u2014 Bitcoin OGs and experts weigh in<\/a><\/em><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The ongoing trial of former FTX CEO Sam Bankman-Fried has uncovered a series of explosive revelations in the form of testimonies from former key FTX and Alameda Research executives.\u00a0 The latest court proceedings on Oct. 12 saw former Alameda CEO Caroline Ellison testify for the third day, following which the jury was presented with a […]<\/p>\n","protected":false},"author":2,"featured_media":173597,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[235,203,210,234,231,232,237,238,236,233],"class_list":["post-173596","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain","tag-bitcoin","tag-crypto-currency","tag-elon-musk","tag-ethereum","tag-hyperledger","tag-ibm","tag-mining","tag-nodes","tag-spacex","tag-tesla"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/173596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=173596"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/173596\/revisions"}],"predecessor-version":[{"id":173599,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/173596\/revisions\/173599"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/173597"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=173596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=173596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=173596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}