The real extraordinary admission is this: > Meanwhile, at a meeting with Alameda employees on Wednesday, Ms. [Caroline] Ellison [CEO of Alameda] explained what

The real extraordinary admission is this: > Meanwhile, at a meeting with Alameda employees on Wednesday, Ms. [Caroline] Ellison [CEO of Alameda] explained what had caused the collapse, according to a person familiar with the matter. Her voice shaking, she apologized, saying she had let the group down. Over recent months, she said, Alameda had taken out loans and used the money to make venture capital investments, among other expenditures. > Around the time the crypto market crashed this spring, Ms. Ellison explained, lenders moved to recall those loans, the person familiar with the meeting said. But the funds that Alameda had spent were no longer easily available, so the company used FTX customer funds to make the payments. Besides her and Mr. Bankman-Fried, she said, two other people knew about the arrangement: Mr. Singh and Mr. Wang. Alameda borrowed short-term to make long-term illiquid VC investments. Sort of what a bank does, but without FDIC insurance, or a central bank lender of last resort guaranteeing their liquidity. The short-term loans were (not unpredictably) called back, but Alameda (not unpredictably) had insufficient liquidity to pay them back, so (extraordinarily) FTX commingled their exchange customers' funds with Alameda to pay back the loans. More discussion: https://twitter.com/WClementeIII/status/1592289824542949376 https://twitter.com/WClementeIII/status/1592289824542949376 Unbelievable that 1) they did this, and 2) they admitted it. Someone needs to tell these kids to stop talking publicly and hire lawyers.