In March 2022, Caroline Ellison, the former CEO of Alameda Research, reported in a memo that FTX collapsed in November with a $10 billion deficit, per court documents.
Executives later calculated that the exchange owed more than $8 billion to customers, which it could not repay.
The new management of the exchange is now trying to recover “millions of dollars,” withdraw over $1 billion from purportedly fraudulent transactions, and uncover agreements allegedly kept from investors and fabricated financial statements.
Ellison and CTO Gary Wang both pleaded guilty to charges tied to the bankruptcy and agreed to cooperate with the investigation.
Ellison admitted to manipulating the price of the FTT token and admitted to knowingly defrauding creditors in knowing that it was wrong.
Wang admitted to being sent to make changes to the platform’s code that gave Alameda extra privileges.
In November 2022, new FTX CEO John Ray stated that the exchange had no control over asset movement and financial information.
