Lawsuit Alleges Alameda Research CEO Caroline Ellison Paid Herself $22.5 Million Bonus Amid FTX Crypto Collapse

By on August 1, 2023 in ArticlesHow Much Does

Caroline Ellison, CEO of Alameda Research, the trading platform for the collapsed FTX cryptocurrency, has already pleaded guilty to seven charges related to the scandal, including counts of wire fraud and money laundering. That's not the end of her legal problems, though, as Fortune is reporting that a new lawsuit against her and other former associates of FTX CEO (and Ellison's ex-boyfriend) Sam Bankman-Fried contains the allegation that she paid herself a bonus of $22.5 million in "misappropriated Debtor funds."

The transfer came weeks before her estimate that FTX was facing a cash deficit exceeding $10 billion. The lawsuit also cites other so-called "bonuses" she gave herself between 2021 and 2022, during the time she was also allegedly committing financial misconduct and fraud. Less than a year after the $22.5 million payout, FTX was filing for Chapter 11 bankruptcy. As the complaint puts it: "No 'bonus' could possibly be justified given Ellison's extensive misconduct."

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The news comes as entries from Ellison's own personal diary were leaked to the press, and they seem to show a young woman in over her head as the CEO of a large cryptocurrency trading platform: "Running Alameda doesn't feel like something I'm that comparatively advantaged at or well suited to do, she wrote in one entry, adding:

"I have been feeling pretty unhappy and overwhelmed with my job…At the end of the day I can't wait to go home and turn off my phone and have a drink and get away from it all."

The New York Times reported that those entries and many others were leaked by Bankman-Fried himself, who was then hit with a gag order by the court because he was believed to have done so as an intimidation tactic against her (she is scheduled to testify against Bankman-Fried in his trial in October). He's also scheduled for another hearing in August to determine whether he will be jailed before his trial.

Ellison told a judge last year that she knew that her actions during the time of FTX's collapse were both wrong and illegal. Before her guilty plea, she was reportedly facing up to 110 years in prison. Her case, including an eventual sentence for the charges, is still underway.

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