{"id":15176,"date":"2022-12-05T21:06:03","date_gmt":"2022-12-05T21:06:03","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/document-claims-alameda-ceo-caroline-ellisons-ftx-margin-position-was-negative-1-3b-in-may-2022-bitcoin-news\/"},"modified":"2022-12-05T21:06:03","modified_gmt":"2022-12-05T21:06:03","slug":"document-claims-alameda-ceo-caroline-ellisons-ftx-margin-position-was-negative-1-3b-in-may-2022-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/document-claims-alameda-ceo-caroline-ellisons-ftx-margin-position-was-negative-1-3b-in-may-2022-bitcoin-news\/","title":{"rendered":"Document Claims Alameda CEO Caroline Ellison\u2019s FTX Margin Position Was Negative $1.3B in May 2022 \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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In a number of recent interviews, the former co-founder of FTX, Sam Bankman-Fried (SBF), explained that he \u201cwasn\u2019t running Alameda\u201d and he \u201cdidn\u2019t know the size of their position.\u201d In a more recent discussion with The Block\u2019s Frank Chaparro, SBF explained that auditors were looking at FTX\u2019s corporate financials, but the auditors were \u201cnot looking at customer positions and not looking at customer risk.\u201d This week, an FTX insider speaking to Bitcoin.com News under terms of anonymity shared a document that purportedly shows Alameda Research CEO Caroline Ellison\u2019s personal account was in the hole by $1.31 billion in May 2022.<\/strong><\/p>\n

SBF Interviews Continue to Highlight a Massive Margin Position That Went Sour<\/h2>\n

There\u2019s been a lot of information shared by the former FTX co-founder Sam Bankman-Fried (SBF) during his interviews, and it seems that somehow, without his knowledge, a large margin account got out of control. This has been blamed<\/a> on \u201cpoorly-labeled accounting\u201d practices and SBF said he \u201cf***ed up.\u201d<\/p>\n

\u201cIn multiple ways, frankly. In terms of letting a margin position get too big, bigger than I thought it was. And not being thorough enough to catch that,\u201d SBF told<\/a> New York Magazine. The massive margin position, that took SBF off guard, has been referred to in many reports about FTX and during SBF interviews.<\/p>\n

\u201cWe should not have allowed a margin position to get that big,\u201d SBF stressed to New York Magazine reporter Jen Wieczner. \u201cIt was too big. And it was too big, given the liquidity of the collateral,\u201d SBF added. In another statement, SBF detailed that Alameda\u2019s margin position was so big that it \u201cwas not going to be closable in a liquid way in order to make good on its obligations.\u201d<\/p>\n

\u201cThat position, in retrospect, seems like it got substantially bigger in the middle of the year,\u201d SBF added. The FTX co-founder continued:<\/p>\n

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That made it go from a somewhat risky position to a position that was way too big to be manageable during a liquidity crisis, and that it would be seriously endangering the ability to deliver customer funds.<\/p>\n<\/blockquote>\n

During SBF\u2019s most recent interview<\/a> with The Block\u2019s Frank Chaparro, the former FTX CEO said that regulators and auditors did not see any financial holes because customer positions, and Alameda Research\u2019s positions, were not included in FTX\u2019s financials. SBF said auditors looked at certain aspects, but they were \u201cnot looking at customer positions and not looking at customer risk.\u201d<\/p>\n

\u201cThis was effectively a customer negative position, and many customers had negative positions open on FTX,\u201d SBF told Chaparro. \u201cThose were not part of FTX\u2019s assets or liabilities, they were customer assets and liabilities, and so FTX\u2019s financials were not directly impacted by this.\u201d Chaparro\u2019s interview also talks about how top executives were \u201cextended large personal lines of credit.\u201d<\/p>\n

FTX Insider Document Supposedly Shows Caroline Ellison\u2019s Margin Position Was a $1.3 Billion Hole<\/h2>\n

This week a document was sent to Bitcoin.com News that allegedly shows Caroline Ellison\u2019s balance on FTX seven months ago in May 2022. According to the source familiar with the matter, Ellison shared this data among a number of FTX staff members when she was experiencing a technical glitch with her personal trading account.<\/p>\n

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A screenshot of the margin position allegedly shared by Caroline Ellison back in May 2022 to a number of FTX staff members. It is claimed that the position belonged to the Alameda Research CEO.<\/figcaption><\/figure>\n

The document shows Ellison ostensibly had a negative balance at that time of around $1.31 billion in May 2022. All FTX accounts show negative balances, if the user has a negative balance for specific reasons such as that a payment wasn\u2019t settled or the user was in debt from margin positions. The documentation that is allegedly tied to Ellison, shows an enormous balance that no ordinary user would have, including a negative quantity of FTX equity.<\/p>\n

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FTX accounts show a negative balance for a few specific reasons.<\/figcaption><\/figure>\n

The document our newsdesk viewed indicates the user\u2019s negative balance owed or held in a margin position, points to a massive amount of FTT<\/a>, megaserum (MSRM), locked megaserum (MSRM), locked serum (SRM), locked maps (MAPS), solana (SOL), ethereum (ETH<\/a>), bitcoin (BTC<\/a>), and millions of dollars worth of stablecoins. The user\u2019s balance, allegedly tied to Alameda CEO Ellison, shows nearly every account is in the negative to the tune of roughly $1.31 billion.<\/p>\n

Chaparro notes<\/a> around the 9:30 mark in his interview that Ellison mentioned that FTX extended quite a bit of credit to Alameda Research. \u201c[Ellison] said that you knew, that Gary knew,\u201d Chaparro pressed during his question, and he said people within both firms knew about these lines of credit. \u201cI think she\u2019s likely correct, that Alameda Research was effectively extended a substantial amount of credit by FTX and in the end, that margin position became under severe stress and it blew out.\u201d<\/p>\n

A negative $1.31 billion margin position, like the one disclosed to our newsdesk this week, is a very large hole. Margin positions refer to trades that are made using borrowed funds and usually, if the trader is unable to maintain the minimum required margin, the position is liquidated in order to repay the borrowed funds. The large margin position shared in May 2022, is around the same time frame<\/a> the Terra LUNA fiasco happened<\/a>.<\/p>\n

The insider that shared the document purportedly tied to Ellison, asked \u201chow can a buddy of SBF generate a debt\u201d of that size \u201cwith no collateral?\u201d There\u2019s a lot of unanswered questions that circle back to Ellison and people have been investigating<\/a> the Alameda CEO for quite some time. Ellison was reportedly spotted<\/a> in New York this past weekend with the FTX office dog called \u2018Gopher.\u2019<\/p>\n

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\nTags in this story
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Alameda Balances<\/a>, Alameda CEO Caroline Ellison<\/a>, Alameda Research<\/a>, Alameda trading<\/a>, Balances<\/a>, Caroline Ellison<\/a>, debt<\/a>, debt over collateral<\/a>, Ellison Balances<\/a>, Frank Chaparro<\/a>, FTT<\/a>, ftx<\/a>, FTX collapse<\/a>, FTX fiasco<\/a>, Interviews<\/a>, Liquidation<\/a>, Locked Coins<\/a>, Locked Sums<\/a>, margin<\/a>, Margin Position<\/a>, Negative $1.3 Billion<\/a>, Negative Balance<\/a>, New York Magazine<\/a>, Sam Bankman-Fried<\/a>, sbf<\/a>, Serum<\/a>, SRM<\/a><\/div>\n<\/div>\n

What do you think about the document that supposedly shows Caroline Ellison had a negative $1.3 billion margin position in May 2022? Let us know what you think about this subject in the comments section below. <\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com<\/a> does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<\/div>\n

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