Lawsuit alleges Caroline Ellison paid herself $22.5m while FTX faced imminent collapse

**Alameda Research CEO Allegedly Paid Millions Despite Knowing About FTX’s Financial Woes**

In a shocking turn of events, Caroline Ellison, the CEO of Alameda Research, has been accused of paying herself millions of dollars in a single bonus payment while being fully aware of the massive financial issues plaguing FTX, a crypto exchange. The alleged wrongdoing took place months before FTX filed for bankruptcy and involved Ellison moving money between various accounts until it ended up in her personal account.

**FTX’s Downfall and Alameda’s Losses**

FTX’s spectacular collapse last year had far-reaching consequences, with Alameda Research, FTX’s affiliate trading firm, also facing significant losses. Alameda Research had suffered huge financial setbacks due to high-risk bets, and FTX was accused of secretly redirecting user funds to its sister firm in an attempt to cover its losses.

**Legal Proceedings and Gross Mismanagement**

Following FTX’s downfall, legal proceedings were initiated, revealing accusations of gross mismanagement against top executives, including founder and CEO Sam Bankman-Fried (SBF). In December, Caroline Ellison herself pleaded guilty to wire fraud and money laundering charges, among others.

**Multimillion-Dollar Bonus**

Reports emerged after FTX’s collapse that both Ellison and SBF were aware of red flags at the crypto exchange three months prior to its downfall. However, a new legal filing alleges that Ellison had knowledge of major financial issues at FTX eight months before they became public. Instead of addressing the problem, she engaged in a series of complex transactions to pay herself a multimillion-dollar bonus.

In March 2022, Ellison estimated that FTX had a cash deficit of over $10 billion, as recorded in her private notes. Just weeks later, she transferred $22.5 million from Alameda to her personal FTX account through various transactions. On March 29, she further transferred $10 million of this “bonus” to her personal bank account, using the funds to invest in an unnamed A.I. safety and research firm. The lawsuit refers to this money as “misappropriated Debtor funds.”

**Ellison’s Misuse of Company Funds**

Additional allegations were made that Ellison had previously misused company funds on multiple occasions to give herself other multimillion-dollar bonuses. The lawsuit states that given Ellison’s extensive misconduct, no bonus could be justified.

**FTX’s Bankruptcy and Bankman-Fried’s Financial Hit**

Eight months after Ellison received the major bonus payment, FTX initiated voluntary Chapter 11 bankruptcy proceedings in the United States. This move followed SBF’s failed attempts to secure emergency funds to cover the company’s financial gaps. Bankman-Fried, once widely respected, saw his entire $16 billion fortune erased due to FTX’s collapse. This represented one of the greatest wealth destructions in history, as he had previously possessed a net worth of $26 billion.

**Ellison’s Struggles as CEO**

Caroline Ellison, who was only 28 years old when FTX and Alameda collapsed, had accumulated substantial wealth during her tenure as CEO of Alameda Research. However, it was revealed that she lacked confidence in her ability to run the company. In diary entries, she expressed feeling overwhelmed and unhappy in her role, often seeking solace by disconnecting from work. In a December hearing, Ellison acknowledged the wrongfulness and illegality of her actions.

Facing a potential prison sentence of 110 years for her crimes, Ellison ultimately pleaded guilty and agreed to cooperate with authorities. The legal proceedings are ongoing.

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