The Shocking Revelation: When Alameda Research Borrowed More Than Just a Cup of Sugar from FTX

Confidential Alameda Recording Unveils Moment Staff First Learned of FTX Deposits

Alameda staff caught off guard by FTX deposits in secret recording

Imagine a secret audio clip, 75 minutes long, capturing the exact moment when 15 former Alameda Research staff discovered that the hedge fund was not just borrowing a cup of sugar, but actually “borrowing” user funds from FTX. Talk about a plot twist!

This clandestine recording, obtained exclusively by Cointelegraph, provides fresh insights into the dizzying tension experienced by Caroline Ellison and her Alameda colleagues as they sensed the imminent collapse of FTX. It’s like witnessing a suspenseful Hollywood movie, but this time the stakes are real.

During an all-hands meeting in Hong Kong on November 9, 2022, Ellison spilled the beans. She revealed that Alameda had been merrily borrowing massive amounts of money through open-term loans, using this borrowed fortune to make some seriously illiquid investments. Picture Alameda as a daring pirate sailing the treacherous seas of financial maneuvering.

But there’s more.

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Most of Alameda’s loans were called in to settle recalls, leaving FTX with a gaping hole in its user funds. Yikes, talk about unintended consequences! FTX, which had been unconventionally generous in allowing Alameda to borrow funds, suddenly found itself in the midst of a financial quagmire.

Hold on to your hats, ladies and gentlemen.

A carefully selected portion of this explosive audio was played in court on the eighth day of Sam Bankman-Fried’s criminal trial, much to the amusement of the attendees. Yes, even in the harrowing world of finance, there is room for humor. In this case, Christian Drappi, a former software engineer at Alameda, played the role of the unwitting comedian.

You see, before the meeting, Drappi and many other Alameda employees were blissfully ignorant of the fact that FTX customer deposits were being misused by their own hedge fund. Drappi, in a moment of disbelief, asked Ellison when she became aware of this misuse and who else in the company knew about it.

Ellison flinched, trying to avoid answering. But Drappi persisted, “I’m sure this wasn’t, like, a YOLO thing, right?” Brilliantly injecting humor into the courtroom, Drappi had to explain the term “YOLO” to everyone present. He just wanted Ellison to confirm that the use of FTX deposits wasn’t some impulsive decision, made on a whim like a teenager yelling “YOLO!” before jumping off a cliff.

As if the comedy wasn’t enough, Drappi described the atmosphere of the meeting as “sunken,” with Ellison exuding little confidence. The shocking revelation of the intricate relationship between FTX and Alameda left him stunned. In fact, he was so stunned that he quit the next day, proving that actions do speak louder than words.

Meanwhile, other witnesses corroborated the tense atmosphere of the meeting. Aditya Baradwaj, an Alameda Research engineer, described the room as a pressure cooker waiting to explode. Ellison dropped bombshell after bombshell, revealing information that had never been discussed internally, like the abandoned acquisition of FTX by its largest competitor, Binance. It’s like watching a magician revealing their most guarded secrets!

The meeting left no doubt in their minds: Alameda had no future, and it was time for everyone to make a swift exit. The room, once brimming with potential, now felt like a sinking ship. So they jumped, leaving behind a trail of shattered dreams and unanswered questions.

So, dear digital asset investors, buckle up! The world of finance may be a rollercoaster ride, but it’s a journey worth taking. Who knows what revelations and surprises await us next?

Stay tuned for the next exciting chapter!

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