The Blubber

Per Crowd Fund Insider

The official SEC document containing the charges against Caroline Ellison of Alameda Research and Gary Wong, co-founder of FTX, notes that they were scheming with Sam Bankman-Fried and others to defraud FTX Trading Ltd.'s equity investors.

The document also highlighted the efforts being made by FTX to portray himself as a good person and a responsible leader. This was seen in the efforts made to push regulation and accountability further.

"Customers around the world believed his lies, and sent billions of dollars to FTX, believing their assets were secure on the FTX trading platform."

The charges highlighted how the defendants tried to hide the scheme from equity investors of the now-bankrupt crypto firm. The document also noted two possibilities that Ellison and Wong either knew or were reckless about the false and misleading statements regarding FTX.

It was also highlighted how Alameda was exempted from risk mitigation measures and how it received special treatment. This included a line of credit that was virtually unlimited and funded by customers of FTX.

"Ellison, acting at the direction of BankmanFried, engaged in automated purchases of FTT tokens on various platforms in order to increase the price of those tokens and inflate the value of Alameda’s collateral"

When crypto assets started to drop in May 2022, lenders of Alameda were asking for repayment of loans worth billions of dollars, and the crypto trading could not satisfy loan obligations. The charges also include how SBF, along with Alameda, allegedly approached project developers to work on trading debuts on FTX, which was described as a pump-and-dump scheme.

SBF then directed billions worth of company funds from FTX to be diverted to Alameda to pay the debts of Alameda.

"Even as it was increasingly clear that Alameda and FTX could not make customers whole, Bankman-Fried and Defendants continued to misappropriate FTX customer funds"

Caroline Ellison and Gary Wang have already pleaded guilty to fraud and were released on a $250K bond.

See flow at unusualwhales.com/flow.

Other News:

• Sam Bankman-Fried reportedly inflated some crypto prices with Alameda Research
• Caroline Ellison and Gary Wang Plead Guilty to Fraud | Released on $250K Bond

Resources:

Crowd Fund Insider