Caroline Ellison, the former CEO of Alameda Research, told a federal court in New York that she knowingly misled lenders about how much the firm had been borrowing from the collapsed FTX crypto exchange and knew that her actions were wrong.
"From 2019 through 2022, I was aware that Alameda was provided access to a borrowing facility on FTX.com, the cryptocurrency exchange run by Mr. Bankman-Fried,” Ellison said, according to the transcript cited by Bloomberg. "In practical terms, this arrangement permitted Alameda access to an unlimited line of credit without being required to post collateral, without having negative balances and without being subject to margin calls on FTX.com’s liquidation protocols.”
Ellison said she and former FTX CEO Sam Bankman-Fried had agreed to hide the arrangement by creating false financial statements and that she knew that Alameda accounts with negative balances signified the firm was borrowing funds from FTX customers.
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