Alameda Research’s former Co-Chief Executive Officer Caroline Ellison estimated there was a more than $10 billion cash deficit at FTX.com about eight months before the crypto exchange collapsed.
(Bloomberg) — Alameda Research’s former Co-Chief Executive Officer Caroline Ellison estimated there was a more than $10 billion cash deficit at FTX.com about eight months before the crypto exchange collapsed.
Ellison made the estimate in March 2022 in private notes, according to the latest complaint filed Thursday in the ongoing bankruptcy process for FTX.
The filing also alleged that FTX executives and Ellison in August last year privately estimated that FTX.com owed customers over $8 billion in fiat currency that “it could not repay.”
Sam Bankman-Fried’s FTX empire slid into a chaotic bankruptcy last November, fomenting turmoil in the crypto sector and spurring officials in the US and elsewhere to tighten regulatory oversight of digital assets.
US authorities allege FTX customer money was used for trading at affiliated hedge fund Alameda and for personal expenses. FTX’s new Chief Executive officer, John Ray, and his advisers are trying to recover funds to repay creditors as part of one of the highest profile bankruptcies ever in the US.
Ellison has admitted to fraud and is cooperating with federal prosecutors. Her representative didn’t immediately reply to a request for comment. Bankman-Fried has rejected an array of charges and faces a trial in October.
According to a lawsuit filed Thursday, FTX Trading Ltd. is seeking to claw back millions of dollars in cash and unwind more than $1 billion in allegedly fraudulent transactions.
Read more: FTX Sues Bankman-Fried, Associates Over $1 Billion in Bad Deals
The case is FTX Trading Ltd., 22-11068, US Bankruptcy Court, District of Delaware.
(Updates with more from the filing from the third paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.