Former Hedge Fund Co-Head Testifies on Fraudulent Actions in Cryptocurrency Market

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Former Hedge Fund Co-Head Testifies on Fraudulent Actions in Cryptocurrency Market

Paraphrased Text: Caroline Ellison, previously the co-head of Sam Bankman-Fried's hedge fund, provided testimony during Bankman-Fried's fraud trial revealing that she was instructed to manipulate the firm's financial statements. This was done in order to prevent a major lender from calling in loans during a downturn in cryptocurrency markets in 2022. Ellison, who was also the former co-CEO of Alameda Research, stated that Bankman-Fried had her find alternative methods to present the firm's liabilities to avoid additional loans becoming due. Additionally, it was disclosed that Bankman-Fried asked Ellison to utilize the fund's line of credit on the FTX cryptocurrency exchange to repay loans. This testimony came from one of three former individuals involved in Bankman-Fried's inner circle who have already pleaded guilty to fraud charges and agreed to cooperate with the Manhattan U.S. Attorney's office.