In Interviews with former cofounders of FTX Sam Bankman-Fried (SBF), it was revealed that he “didn’t run Alameda” “didn’t know the size of his role.” In a discussion from a recent meeting with The Block’s Frank Chaparro, SBF stated that auditors were inspecting FTX’s corporate finances, but not looking into client positions or risk. This week, a source shared a document with Bitcoin.com News, under anonymity, purporting to show Alameda Research CEO Caroline Ellison’s margin position was in the red for $1.31 trillion in May 2022.
SBF’s interviews continue to emphasize the immense margin of error in this position
The former cofounders of FTX shared a lot of information during Sam Bankman-Fried’s (SBF) interviews. It appears that a high margin account slipped away from control, even though he didn’t know. This was attributed to “mislabeled accounting” which SBF said he practices. “We screwed up.”
“You have lots of options,” SBF told New York Magazine. “It’s simply a matter of allowing a margin position to get too big, or larger than I thought. And we weren’t thorough enough to spot it.” SBF was taken by surprise by the massive margin position, which has been mentioned in many reports on FTX and during interviews with SBF.
“We shouldn’t have allowed a margin position to be that large,” SBF stressed to New York Magazine reporter Jen Wieczner. “It was too big. And it was too big, given the liquidity of the guarantee,” SBF added. He also stated that Alameda’s margin position was so large, that “it was not going to be able to close liquidly to meet its obligations.”
“That position, in retrospect, appears to have grown substantially in the middle of the year,” SBF added. The FTX co-founder continued:
This placed him in a precarious financial position that would make it hard for him to manage liquidity crises. It would also significantly affect his ability to supply client funds.
During his most recent interview with The Block’s Frank Chaparro, the former chief executive of FTX said, “Regulators and auditors couldn’t spot any financial issues due to client positions.” SBF clarified that Alameda Research’s financials didn’t include positions held by FTX. He asserted that the auditors had looked at certain aspects but not all. “They weren’t looking at client positions or client risk.”
“This was effectively a negative position from the client, and many clients had negative positions open in FTX,” SBF told Chaparro. “Those weren’t part of FTX’s assets or liabilities, they were customer assets and liabilities, so FTX’s finances were not directly affected by this.” Chaparro’s interview also speaks to high-level executives “extending large personal lines of credit.”
FTX Insider Document Allegedly Demonstrates Caroline Ellison’s Margin Position Was A $1.3 Billion Hole
This week, a document was sent to Bitcoin.com News that allegedly shows Caroline Ellison’s FTX balance seven months ago in May 2022. According to the source of the information, Ellison experienced technical issues with her trading account when FTX staff shared her details.
The document shows that at the time of writing, there was a net surplus of $1.31 trillion. All FTX accounts that have negative balances can be demonstrated if
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The news feed indicates that the user has a negative balance/is in a margin situation. This document points to huge amounts of FTT and megaserum, mapslocked (MAPS), serum locked (SRM), serum locked (MAPS), solana (SOL), solana (SOL), ethereum, Bitcoin (BTC) and millions of dollars worth stablecoins. The User’s Balance is purportedly connected Alameda CEO Ellison. This graph shows that $1.31 trillion is the average negative balance in almost all accounts.
Chaparro mentioned in his interview that Ellison noted that FTX provides this service. Alameda Research Credit is a lot. “[Ellison] He said that you knew, that Gary knew,” Chaparro said when asked a question. He replied that both companies were aware of these lines. “I think you’re probably right, that FTX did indeed give Alameda Research a substantial amount of credit, and ultimately, that margin position came under severe stress and blew up.”
A negative margin position at $1.31 billion such as the one revealed to us this week is huge. Margin Positions refer to trades made with borrowed money. If the trader fails or is unable to maintain the required minimum margin then the position can be liquidated in order to repay the borrowed money. The HighPositions in the -margin are also shared May 2022 is the exact same year as 2022. Terra LUNA fiasco occurred.
The document was shared by a whistleblower. Ellison was asked “how can a friend of SBF create a debt” and what is the size “without collateral?” There are many unanswered questions that can be traced back to Ellison. People have been looking at Alameda for a considerable time, and he could be the CEO. Ellison was reportedly spotted out and about in New York last weekend, accompanied by the FTX canine named Gopher.
What do you think of this document? Caroline Ellison had a negative margin position of $1.3million in May 2022? Please let us know your opinion in the comments below.
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