Document claims Alameda CEO Caroline Ellison’s FTX margin was negative $1.3 billion in May 2022 – Bitcoin News

In a series of recent interviews, former FTX co-founder Sam Bankman-Fried (SBF) explained that he didn’t run Alameda and “didn’t know the extent of their position.” In a more recent discussion with The Block’s Frank Chaparro, SBF explained that auditors look at FTX’s corporate financials, but auditors “don’t look at client positions and they don’t look at client risk.” This week, an FTX insider, who spoke to News on condition of anonymity, shared a document showing Alameda Research CEO Caroline Ellison’s personal account was worth $1.31 billion in May 2022.

SBF Interviews Continue to Highlight Souring Mass Margin Position

Former FTX co-founder Sam Bankman-Fried (SBF) shared a lot of information during interviews, and apparently, without his knowledge, a large margin account had gotten out of hand. This was blamed on “poorly labeled accounting” practices, which the SBF said was “absent”.

“In many ways, obviously. In terms of allowing the margin position to be very large, it’s bigger than I thought. And I’m not comprehensive enough to capture it,” he told SBF New York Magazine. The massive margin position that discredits SBF has been referenced in many reports on FTX and during SBF interviews.

“We shouldn’t have let the margin position get so big,” SBF told New York Magazine reporter Jen Wieczner. “It was huge. Considering the liquidity of the collateral, it was very large,” SBF added. In another statement, SBF detailed that Alameda’s margin position was so large that it “could not be liquidated to meet its obligations.”

“This position, in retrospect, appears to have grown significantly in the middle of the year,” SBF said. The FTX co-founder continued:

This has moved it from a somewhat risky position to an unmanageably large position in the event of a liquidity crisis, which would seriously threaten its ability to deliver client funds.

During SBF’s most recent interview with The Block’s Frank Chaparro, the former FTX CEO said regulators and auditors did not see any financial gaps because the client positions and Alameda Research’s positions were not included in FTX’s financial statements. The SBF said the auditors looked at certain aspects but “did not look at client positions and client risk”.

“It was actually a negative position for the client, and many clients had negative positions in FTX,” he told SBF Chaparro. “These were not part of FTX’s assets or liabilities, they were the customers’ assets and liabilities, and therefore FTX’s financial performance was not directly affected.” Chaparro’s interview also mentions senior executives “extending large personal lines of credit.”

The FTX Insider Document reveals that Caroline Ellison’s margin position is a $1.3 billion gap.

This week, News was sent a document showing Caroline Ellison’s FTX balance seven months ago in May 2022. According to a source familiar with the matter, Ellison shared the information among a number of FTX employees. technical failure in personal trading account.

A screenshot of a margin position allegedly shared by Caroline Ellison to a number of FTX employees in May 2022. This position is claimed to belong to the CEO of Alameda Research.

Ellison had a negative balance of about $1.31 billion as of May 2022, the filing shows. All FTX accounts show negative balances if the user has defaulted or the user has a negative balance due to certain reasons. in debt from margin positions. Documents allegedly linked to Ellison show a large balance, including a negative amount of FTX equity, that no ordinary user could have.

FTX accounts show a negative balance for several specific reasons.

The document viewed by our news desk shows the user’s negative balance owed or held in a margin position, indicates a large amount of FTT, megaserum (MSRM), locked megaserum (MSRM), locked serum (SRM), locked maps (MAPS), solan. (SOL), ethereum (ETH), bitcoin (BTC) and millions of dollars worth of stablecoins. User balances allegedly tied to Alameda CEO Ellison show nearly every account in the negative by about $1.31 billion.

Chaparro mentions around the 9:30 mark in the interview that Ellison mentioned that FTX gave the Alameda Study enough credit. “[Ellison] he said you know, Gary knows,” Chaparro pressed during questioning, adding that people at both firms knew about those lines of credit. “I think he’s probably right that Alameda Research has been given a significant amount of credit by FTX, and as a result, that margin position has been seriously stressed and blown.”

As revealed to our news desk this week, the negative $1.31 billion margin position is a huge gap. Margin positions refer to transactions carried out using borrowed funds, and typically, if the trader cannot maintain the minimum required margin, the position is liquidated to repay the borrowed funds. A large margin position shared in May 2022 is the same time frame as the Terra LUNA fiasco.

“How can a friend of SBF create debt without collateral?” said the insider, who shared a document allegedly linked to Ellison. There are many unanswered questions going back to Ellison, and people have been investigating the Alameda CEO for some time. It is reported that he was seen with the FTX office dog named “.

Tags in this story

Alameda Balances, Alameda CEO Caroline Ellison, Alameda Research, Alameda trading, Balances, Caroline Ellison, debt, collateralized debt, Ellison Balances, Frank Chaparro, FTT, ftx, FTX collapse, FTX fiasco, Interviews, Liquidins, , margin, Margin Position , Negative $1.3 Billion , Negative Balance , New York Magazine , Sam Bankman-Fried , sbf , Serum , SRM

What do you think of Caroline Ellison’s May 2022 filing showing a negative $1.3 billion margin position? Let us know what you think about this topic in the comments section below.

Jamie Redman

Jamie Redman is Head of News at News and a fintech journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open source code and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for News about disruptive protocols emerging today.

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