FTX Used $100 Million of Customer Funds to Bribe Chinese Officials, Accomplice Testifies

Former CEO Sam Bankman-Fried's former girlfriend and partner testified in court that the bankrupt cryptocurrency exchange FTX utilized customer funds for bribing corrupt Chinese officials.

Caroline Ellison, during her court appearance, revealed that Bankman-Fried had instructed her to engage in criminal activities related to fraud.

Ellison also alleged that Bankman-Fried, the second-largest donor to the Democratic Party in 2022, used loans for making political contributions.

Ellison disclosed in court that $100 million from customer deposits had been employed in bribing Chinese officials.

The blame for the FTX collapse was once again placed on Bankman-Fried, a disgraced Democratic donor who had to endure several days of testimony from colleagues Adam Yedidia and Gary Wang.

Ellison, who has been cooperating with federal authorities, is anticipated to receive a plea deal for her assistance in incriminating her ex-boyfriend.

At the start of her testimony, Ellison admitted her involvement in fraud, conspiracy to commit fraud, and money laundering, having pleaded guilty to these charges in December 2022, as per the Epoch Times.

She reportedly stated in court, "He directed me to commit these crimes."

Ellison previously served as the CEO of Alameda Research, FTX's affiliated hedge fund, receiving over $20 million in salary and bonuses in 2021.

Revelations in court disclosed that Alameda had a $65 billion line of credit with FTX, which ultimately led to an $8 billion debt comprised of customer deposits.

Ellison made further shocking allegations, suggesting that Alameda used $100 million in FTX customer deposits to bribe Chinese officials, allegedly to gain access to frozen cryptocurrency worth up to $1 billion in China.

There were claims that the company attempted to recover the funds through accounts linked to Thai prostitutes.

Bankman-Fried supposedly contemplated selling company shares to investors like Saudi Crown Prince Mohammad bin Salman.

Ellison informed the jury that Alameda extended loans to Bankman-Fried and other FTX executives, and these funds were used for political donations.

Yedidia, who worked in FTX's Hong Kong office before the company's collapse, had previously testified that FTX was using customer deposits to pay off loans, condemning the company's actions as "flagrantly wrong."

FTX was reported to have taken $10 billion from customer deposits, essentially letting Alameda Research obtain loans from these funds.

Bankman-Fried then loaned money to himself to settle his own loans and debts.

Political donations primarily included a $5.2 million contribution to Democrat President Joe Biden's 2020 campaign, elevating Bankman-Fried's position on the donor list.

As reported by Time, over $70 million was donated to election campaigns, with an additional $40 million contributed to politicians and committees in advance of the 2022 midterms.