Ex-FTX exec in hot water over multi-million-dollar bonuses – lawsuit
A former executive at the now-bankrupt crypto exchange FTX allegedly paid herself millions of dollars in bonus payments while aware of a major cash deficit at the exchange, according to a legal filing published on Thursday.
Caroline Ellison (28) ran the crypto hedge fund Alameda Research, which was a subsidiary of FTX. She was an associate of former FTX chief executive Sam Bankman-Fried.
According to Thursday’s filing with the Bankruptcy Court for the District of Delaware, Ellison caused Alameda, “through a series of convoluted transfers,” to pay herself a bonus of $22.5 million in late March 2022. She also allegedly received further “cash bonus transfers” from Alameda and one of its subsidiaries of over $6 million.
“Given her extensive misconduct, including participation in the looting of billions of dollars of debtor (FTX Trading LTD. assets), Ellison clearly did not deserve any ‘bonus,’” the lawsuit reads.
According to the filing, the transfers were made when FTX and Alameda were insolvent, and Ellison knew it.
By March 2022, she privately estimated that the FTX exchange had a cash deficit of more than $10 billion, the lawsuit claims.
Fortune magazine also reported on the filing, saying lawyers for Ellison were not available for comment.
Crypto exchange FTX collapsed last November, dragging Alameda Research down with it. The following month, both Bankman-Fried and Ellison pleaded guilty to the criminal charges against them. According to the prosecution, the defendants abused their control over FTX to commit one of the largest financial frauds in history. The court documents allege that they used the funds to finance luxury condominiums, make political and “charitable” contributions, and pursue other pet projects, in what’s become “one of the largest financial frauds in history.”
Ellison faces several charges, including wire fraud and money laundering, which collectively carry a maximum prison sentence of 110 years.
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