Caroline Ellison Empties Her Bank Account to finally Close the Final Chapter of the FTX Scandal

Caroline Ellison, former head of FTX-associated trading firm Alameda Research, has agreed to surrender all of her assets as an agreed-on settlement with FTX bankruptcy estate.

This would leave Ellison with nothing else other than certain physical personal property.

Returning money back to investors

On Monday, Judge John Dorsey in the U.S. Bankruptcy Court for District of Deleware approved FTX's reorganization plan, which would allow 98% of its creditors to receive at least 118% of their claim value in cash.

This would mean that Ellison would have to surrender the $22.5 million in bonus payments transfered to her in Febrary 2022, as well as $6.3 million transfer to her in July and September 2021. This would wipe out all of her savings she had earned throughout the years, leaving her only a miniscue amount for her to pay for her legal fees and to the government.

This was supposedly good news for investors who have lost their money through the FTX saga, but it turns out that investors are pissed. This is because the money they are getting back is based on the case value of their account back in November 2022.

If they were to use today's market rate for the various cryptocurrencies they invested in, they could have gotten up to 4 times the amount they are getting back!

Ellison's role in closing the chapter

From the time FTX declared bankruptcy back in November 2022 till today, it took less than 24 months for authorities to close the case and reach a settlement where customers would be getting back their money.

Experts have called a "one in a million miracle case", crediting the rapid progress and positive ending to Caroline Ellison. During her hearing, Ellison's lawyers also stressed time and time again how Ellison cooperated and facilitated the investigation without any reservations.

In a September filing prior to Ellison's sentencing, John John J.Ray III, CEO of the FTX bankruptcy estate, said that Ellison has "provided the Debtors with valuable assistance and cooperation, which resulted in the recovery of hundreds of millions of dollars in Debtor assets for the benefit of creditors.

Last month, Ellison was sentenced to two years for her role in the collapse of FTX, which caused users to lose billions of dollars. Sam Bankman-Fried, founder of FTX, was sentenced to nearly 25 years in prison in March and ordered to pay back up to $11 billion in investor and lender losses.

Failed FTX 2.0

There were also rumours that there could potentially be an FTX 2.0, but the idea was ultimately ruled out. FTX CEO John J. Ray III told Wall Street Journey in June 2022 that the company has begun the process of soliciting interested parties to the reboot of the FTX.com exchange.

It was said that FTX would have been given a new name as part of the rebranding. But FTX lawyer Andrew Dietderich later revealed that after an exhaustive effort, no investors were ready to commit the capital to restart FTX.