Former Software Engineer Reveals Moment He Realized Trading Firm FTX was on the Brink of Collapse
A former software engineer who worked at a trading firm associated with cryptocurrency exchange FTX has shared the moment he realized the company was about to collapse. Aditya Baradwaj, who was employed at FTX’s sister trading firm, Alameda Research, recalled how he and his colleagues tried to order food using a company credit card but found it declined. This incident occurred in November last year, shortly after FTX filed for bankruptcy.
FTX had gained a reputation for showering its employees with lavish perks, courtesy of its CEO, Sam Bankman-Fried. Workers at the firm enjoyed extravagant benefits and were accustomed to a comfortable lifestyle. However, the declined credit card signaled a possible financial crisis for the company.
A significant meeting held by Caroline Ellison, CEO of Alameda Research and Bankman-Fried’s ex-girlfriend, further confirmed the dire situation. During the meeting, Ellison tearfully admitted that Bankman-Fried had allowed Alameda to use FTX user deposits. This revelation shook the employees, who had relied on Ellison’s leadership and previously considered her a kind person.
Baradwaj described the intense pressure they felt as the news about FTX’s bankruptcy spread internationally. He and his colleagues feared legal repercussions while being stranded in Hong Kong. The revelations made by Ellison during the meeting are expected to play a crucial role in Bankman-Fried’s upcoming federal trial, where he faces charges of embezzling billions of dollars in customer funds.
Following the meeting, Baradwaj and his colleagues quickly made plans to leave Hong Kong. Two days later, FTX, Alameda, and their affiliated entities filed for bankruptcy. The collapse of the company was a shocking turn of events, particularly given the extravagant lifestyle FTX employees had become accustomed to.
Reflecting on his former boss, Baradwaj had positive impressions of Ellison until her confession. He believed she was a good boss and a kind person. However, her admission of guilt changed everything, and the employees distanced themselves from her.
Bankman-Fried, currently held in jail, has pleaded not guilty to charges of embezzlement, securities fraud, money laundering, and campaign-finance violations. The trial is set to begin on October 3 in Manhattan. Bankman-Fried’s alleged actions include siphoning company funds for personal use, making extravagant real estate purchases, funding risky trades, and making political donations.
Several other former FTX executives have already pleaded guilty to fraud and conspiracy charges and are cooperating with investigators. Bankman-Fried could face more than 100 years in prison if convicted. The collapse of FTX has resulted in both criminal and civil investigations, with allegations of wrongdoing against Bankman-Fried and his associates.