Former Alameda Research CEO Ellison ‘Truly Sorry’ for Fraud Offenses

Former Alameda Research CEO Caroline Ellison revealed she is remorseful for her crypto fraud actions.

A close collaborator with former FTX CEO Sam Bankman-Fried, Ellison revealed in her recently unsealed testimony from her guilty plea this week that she was “truly sorry” for her involvement in FTX’s crypto fraud.

According to the Wall Street Journal on Friday (Dec. 23), Ellison revealed during her hearing that she was conspiring to use billions of dollars from FTX customer accounts to repay loans that crypto platform Alameda had taken out to make risky investments.

In addition, other FTX executives had created special settings that gave Alameda access to an unlimited line of credit, another offense Ellison was aware of during her time at the company.

“I also understood that many FTX customers invested in crypto derivatives and that most FTX customers did not expect that FTX would lend out their digital asset holdings and fiat currency deposits to Alameda in this fashion,” she said in the testimony.

Crypto fraud regulation is growing in public awareness as the crypto trading industry recovers from the bankruptcy announcements of exchanges like FTX and BlockFi over the last month.

As a result, the leadership of these crypto companies are having to answer as to why these companies have so publicly failed and what it means for their customers.

For instance, Sam Bankman-Fried has also been facing court hearings this week, culminating in his being released from custody on a $250 million bond on Thursday.

At the time, he was also ordered to live at his parents’ home in California, be electronically monitored and restrict his travel to parts of California and New York. 

According to reports, Magistrate Judge Gabriel Gorenstein in New York City said he agreed to the deal because he believed Bankman-Fried wasn’t a flight risk, didn’t pose a risk to the community and would be easily recognized if he were to try to hide.

Another FTX co-founder, Gary Wang, also pleaded guilty on Thursday to four fraud charges and has agreed to cooperate with the U.S. Department of Justice in exchange for being released on bail.