Sam Bankman Fried (Shutterstock photo, YouTube/David Rubenstein)
The story of the collapsing crypto exchange FTX never ceases to amaze, and over the weekend more details were revealed about what in recent days has been dubbed ‘one of the biggest scams in history’.
Carolyn Ellison, CEO of Alameda Research from the FTX Group and ex-spouse of the founder of the exchange, Sam Bankman-Fried (hereafter: SVP), and the company’s VP of Technology, Gary Wang, both admitted earlier this week that all the executives clearly knew they were in violation Laws, steal money from the customers and hide it from the customers and even the investors – but they cooperated and allowed the situation to continue until the bankruptcy last month.
Alison admitted that the company she managed was given the ability to withdraw funds directly from the exchange’s customer wallets without any restrictions or notice, adding that “we prepared certain quarterly balance sheets that hid the extent of Alamida’s loans and the billions of dollars in loans that Alamida gave to FTX executives and related entities.” That is: not only does she admit that she stole money from her company, but also for her personal needs and those of her partners in crime. In June 2022, when several major lenders to FTX demanded to get their money back, Alison admits that she was among those who called to do so by stealing the money from the accounts of the users of the exchange. “I’m really sorry for what I did,” she said.
However, one must be suspicious of Ellison, and of all the current proceedings surrounding FTX; After all, Alison is charged with almost the same list of charges as her ex, and pleads guilty to all of them, yet her bail was set at a thousandth of SBP’s – $250,000 compared to $250 million. And if that wasn’t enough, her plea deal included a commitment by the prosecution In New York not to demand any punishment for her other than trying to return stolen money – let’s remember that this is a woman who was one of the initiators of a robbery in the amount of 8-10 billion dollars.
And if all this is not enough, the hive around Ellison stinks from all directions: her father, Glenn Ellison, was the employer of the head of the Securities and Exchange Commission (SEC), Gary Gensler, at the Massachusetts Institute of Technology (MIT), and the law firm that represents her includes an employee A senior official who also came from the Commission. In a completely ludicrous manner, only after approving the settlement, District Judge Roni Abrahams announced that she was disqualified from hearing the case, since the law firm her husband is a partner in advised FTX last year, and represents a number of investors in the company who may be parties to the hearings.
In a separate hearing, in which Abrahams also sat on the bench hours before admitting that she was affected by a conflict of interest, Wang also admitted to all four charges against him, and said that he was “directed” to change FTX’s code to allow Alameda to withdraw funds at the push of a button, without any control And even without this being recorded in the company’s accounts. However, he refused to say who gave him the directive – which means that it was most likely Alison, and not SBP, against whom they are both willing to testify provided they remain free people.
All of this happened, as mentioned, already on Monday, but was kept under a cloak of secrecy for fear that if it becomes known that the two people closest to him in the company are testifying against him, SVP will refuse to hand himself over to the US and will use the sums he still has access to to escape. Only after he was extradited to the US on Wednesday was it allowed to be published that two of his associates are serving as witnesses against him, and only on Friday was the protocol of the hearings in which they pleaded guilty published.
The prosecutor, Nicholas Ross, promised at the hearing that evidence from “a number of cooperating witnesses” would be presented at the trial – meaning, apparently, other senior officials of the company intend to testify against the boss in exchange for avoiding responsibility.
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