Caroline Ellison revealed that co-founder of FTX was trying to take regulatory action against crypto exchange Binance, to increase FTX’s share of the crypto market.
FTX crypto exchange was the second highest ranked crypto exchange in the crypto sector in terms of Crypto trading volume, after Binance exchange. The market share of FTX Exchange was almost 10% and that of Binance almost 50%. Notably, Binance was one of the investors in the FTX exchange, but Binance withdrew its investment from FTX between 2021 and 2022, citing a conflict of interest between the CEOs of both exchanges.
In November 2022, the crypto exchange FTX suffered a serious collapse following a report from the Coindesk media that exposed the poor financial position of the FTX exchange and FTX’s sister company Alameda Research. Subsequent investigation revealed that Sam Bankman-Fried (SBF), the largest stakeholder in FTX & Alameda, misused most of the client’s money for personal benefits. On November 14, 2022, FTX filed for Chapter 11 bankruptcy in a U.S. bankruptcy court to save itself from legal action for FTX customers.
Just a day ago, on the second day that Caroline Ellison, former CEO of Alameda Research, appeared in court, a handwritten note was presented. Those were Ellison’s notes describing the relationship between FTX and Alameda.
Ellison told jurors that FTX ex-CEO SBF planned to close Alameda Research after the collapse of the Terra (Luna) crypto project and also wanted to raise $1 billion from the Saudi Prince, known for his investments in blockchain gaming.
Ellison also revealed that a year before the demise of the Terra project, SBF’s main goal was to hit Binance with regulatory action so that FTX would have a better chance to increase dominance and market share.
She also said that SBF was willing to raise money from crypto lending company BlockFi, which already lent Alameda $660 million.
Alameda’s former CEO admitted that he could sustain Alameda’s performance during the crypto winter with a better strategy, but Alameda had already spent billions from its line of credit with FTX.
Using this latest statement from Ellison, some people have solved a past theory of unofficial two meetings between SBF and US SEC Chairman Gary Gensler. People claim that SBF passed on hidden unethical information regarding Binance to the SEC chairman so that the SEC office can initiate multiple regulatory actions against Binance. However, it is only a theory and there is no evidence to prove that this theory is true, but we can consider this theory to be true until Gensler officially reveals the purpose of that meeting.
Also Read: Former Alameda Engineer Reveals Alameda Lost Hundreds of Millions Due to Lack of Seriousness