- Caroline Ellison accuses Sam Bankman-Fried of causing FTX’s collapse.
- Ellison claims Bankman-Fried pressured her to create fake balance sheets to hide debt.
- FTX’s scandal widens as former CTO Gary Wang also testifies about false insurance fund figures.
The drama following the fraud trial surrounding the bankrupt FTX exchange, which was the second-largest trading platform at its peak, has taken a new turn. In a recent revelation, Caroline Ellison, the former Chief Executive Officer of Alameda Research, an FTX-affiliated trading firm, has directed the blame of FTX’s insolvency at FTX co-founder Sam Bankman-Fried.
According to a recent report on Bloomberg, Ellison asserted that Bankman-Fried was the driving force behind the collapse of FTX. The report noted that Ellison vehemently refuted Bankman-Fried’s efforts to shift blame onto her. The former Alameda Research CEO alleged that Bankman-Fried pressured her to generate falsified balance sheets to conceal mounting debts.
Notably, this bombshell disclosure comes after the crypto market turmoil in June 2022, during which both Ellison and Bankman-Fried grappled with a substantial shortfall in Alameda Research’s balance sheet. The heart of the matter was that the FTX’s affiliated hedge fund had borrowed billions of dollars of customers’ crypto deposits within the exchange.
Ellison confronted a moral and ethical dilemma regarding the precarious state of their operation. But according to her account, Bankman-Fried came forward with a solution. The solution was the creation of new, albeit fraudulent, balance sheets. Ellison alleges that she, under his directive, drafted seven such misleading financial documents.
These allegations have thrust the crypto community into disarray as the accountability battle between Ellison and Bankman-Fried takes center stage. Meanwhile, Ellison is not the only FTX business insider who has testified against Bankman-Fried. Like Ellison, FTX’s former chief technology officer Gary Wang has narrated how the bankrupt firm falsified Insurance Fund figures to the jury.
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