An undisclosed audio clip has emerged, shedding light on how Alameda’s employees, affiliated with FTX, learned about the dire situations faced by both entities. The 75-minute recording, secretly captured by Rick Best during an all-hands meeting in Hong Kong on November 9, 2022, features ex-CEO Caroline Ellison divulging startling details about Alameda’s financial precariousness.
Ellison revealed that Alameda had borrowed significant amounts through open-term loans to invest in illiquid assets, predominantly in FTX. During the meeting, she admitted that Alameda had utilized user funds from the SBF-led exchange, leading to a shortfall in user funds. To the astonishment of the 15 employees present, it was revealed that Alameda had been borrowing user funds without their knowledge, causing FTX to face financial challenges.
Christian Drappi, a former software engineer at Alameda, provided a copy of the audio to the prosecutors. Drappi’s testimony exposed the extent of the misuse of FTX user deposits by Alameda. He questioned Ellison about her awareness of these activities, leading to a tense exchange where Ellison hesitated to answer Drappi’s inquiries.
Ellison later confessed that Bankman-Fried, herself, Gary Wang, and Nishad Singh—the latter three having all accepted plea deals—were aware. When asked who instructed the use of FTX customer funds, she hesitantly responded, “Um, Sam, I suppose?” with a nervous giggle.
Alameda Staff Had No Clue On Fund Withdrawal From FTX
Drappi, who joined Alameda almost a year ago, had no knowledge of Bankman-Fried’s alleged conspiracy to withdraw customer funds from FTX to spend—through Alameda—on venture investments, loan repayments, and risky crypto bets. That changed on Nov. 8, at approximately 11 p.m.
Ellison’s revelations, including undisclosed details about the abandoned acquisition of FTX by Binance, left employees stunned. Alameda Research Engineer Aditya Bharadwaj stated that it became evident that there was no future for the company, leading to the abrupt departure of the staff shortly after the meeting.
The shocking revelations stand as a stark reminder of the importance of trust, integrity, and adherence to ethical standards in the fast-paced world of cryptocurrency, urging companies and investors to exercise vigilance in their dealings.