Caroline Ellison: FTX has basically been allowing Alameda to borrow user funds

Odaily Planet Daily News Former Alameda Research CEO Caroline Ellison held a meeting in Hong Kong a few days before the collapse of FTX (November 9, 2022), and nearly half of Alameda employees participated. Caroline Ellison said at the meeting that Alameda has borrowed money from FTX for a year, and Alameda has used the borrowed funds to make some less liquid investments. Most of Alameda's loans are required to be repaid in order to meet those loan repayment requirements. Alameda ended up borrowing a large amount of funds on FTX, causing FTX users to have insufficient funds. So once FUD starts to appear about this, users will start withdrawing their funds. During the meeting, an employee in attendance asked Ellison how FTX planned to repay its customers, and Ellison said FTX planned to raise more capital to fill the funding gap. Another employee inquired about Alameda's backdoor access to FTX and asked how long Alameda had been using FTX customers' funds to plug holes in its balance sheet. Ellison responded: “As far as I know, FTX has basically been allowing Alameda to borrow user funds.” (Cointelegraph)