The actual statement portion after all the understandings
> THE DEFENDANT: From approximately March 2018 through November 2022, I worked at Alameda Research, a cryptocurrency trading firm principally owned by Sam Bankman-Fried. At Alameda Research, I first worked as a cryptocurrency trade and was later appointed by Mr. Bankman-Fried as the co-CEO and
eventually CEO of Alameda Research Ltd., the subsidiary that
housed the firm's main trading and market making operations.
In those roles, I reported to Mr. Bankman-Fried.
From 2019 through 2022, I was aware that Alameda was
provided access to a borrowing facility on FTX.com, the
cryptocurrency exchange run by Mr. Bankman-Fried. I understood
that FTX executives had implemented special settings on
Alameda's FTX.com account that permitted Alameda to maintain
negative balances in various fiat currencies and crypto
currencies. In practical terms, this arrangement permitted
Alameda access to an unlimited line of credit without being
required to post collateral, without having to pay interest on
negative balances and without being subject to margin calls or
FTX.com's liquidation protocols. I understood that if
Alameda's FTX accounts had significant negative balances in any
particular currency, it meant that Alameda was borrowing funds
that FTX's customers had deposited onto the exchange.
While I was co-CEO and then CEO, I understood that
Alameda had made numerous large illiquid venture investments
and had lent money to Mr. Bankman-Fried and other FTX
executives. I also understood that Alameda had financed these
investments with short-term and open-term loans worth several
billion dollars from external lenders in the cryptocurrency
industry. When many of those loans were recalled by
lenders in and around June 2022, I agreed with others to borrow
several billion dollars from FTX to repay those loans. I
understood that FTX would need to use customer funds to finance
its loans to Alameda. I also understood that many FTX
customers invested in crypto derivatives and that most FTX
customers did not expect that FTX would lend out their digital
asset holdings and fiat currency deposits to Alameda in this
fashion.
From in and around July 2022 through at least
October 2022, I agreed with Mr. Bankman-Fried and others to
provide materially misleading financial statements to Alameda's
lenders. In furtherance of this agreement, for example, we
prepared certain quarterly balance sheets that concealed the
extent of Alameda's borrowing and the billions of dollars in
loans that Alameda had made to FTX executives and to related
parties. I also understood that FTX had not disclosed to FTX's
equity investors that Alameda could borrow a potentially
unlimited amount from FTX, thereby putting customer assets at
risk. I agreed with Mr. Bankman-Fried and others not to
publicly disclose the true nature of the relationship between
Alameda and FTX, including Alameda's credit arrangement.
I also understood that Mr. Bankman-Fried and others
funded certain investments in amounts more than $10,000 with
customer funds that FTX had lent to Alameda. The investments
were done in the name of Alameda instead of FTX in order to
conceal the source and nature of those funds.
I am truly sorry for what I did. I knew that it was
wrong. And I want to apologize for my actions to the affected
customers of FTX, lenders to Alameda and investors in FTX.
Since FTX and Alameda collapsed in November 2022, I have worked
hard to assist with the recovery of assets for the benefit of
customers and to cooperate with the government's investigation.
I am here today to accept responsibility for my actions by
pleading guilty.
> THE DEFENDANT: From approximately March 2018 through November 2022, I worked at Alameda Research, a cryptocurrency trading firm principally owned by Sam Bankman-Fried. At Alameda Research, I first worked as a cryptocurrency trade and was later appointed by Mr. Bankman-Fried as the co-CEO and eventually CEO of Alameda Research Ltd., the subsidiary that housed the firm's main trading and market making operations. In those roles, I reported to Mr. Bankman-Fried. From 2019 through 2022, I was aware that Alameda was provided access to a borrowing facility on FTX.com, the cryptocurrency exchange run by Mr. Bankman-Fried. I understood that FTX executives had implemented special settings on Alameda's FTX.com account that permitted Alameda to maintain negative balances in various fiat currencies and crypto currencies. In practical terms, this arrangement permitted Alameda access to an unlimited line of credit without being required to post collateral, without having to pay interest on negative balances and without being subject to margin calls or FTX.com's liquidation protocols. I understood that if Alameda's FTX accounts had significant negative balances in any particular currency, it meant that Alameda was borrowing funds that FTX's customers had deposited onto the exchange. While I was co-CEO and then CEO, I understood that Alameda had made numerous large illiquid venture investments and had lent money to Mr. Bankman-Fried and other FTX executives. I also understood that Alameda had financed these investments with short-term and open-term loans worth several billion dollars from external lenders in the cryptocurrency industry. When many of those loans were recalled by lenders in and around June 2022, I agreed with others to borrow several billion dollars from FTX to repay those loans. I understood that FTX would need to use customer funds to finance its loans to Alameda. I also understood that many FTX customers invested in crypto derivatives and that most FTX customers did not expect that FTX would lend out their digital asset holdings and fiat currency deposits to Alameda in this fashion. From in and around July 2022 through at least October 2022, I agreed with Mr. Bankman-Fried and others to provide materially misleading financial statements to Alameda's lenders. In furtherance of this agreement, for example, we prepared certain quarterly balance sheets that concealed the extent of Alameda's borrowing and the billions of dollars in loans that Alameda had made to FTX executives and to related parties. I also understood that FTX had not disclosed to FTX's equity investors that Alameda could borrow a potentially unlimited amount from FTX, thereby putting customer assets at risk. I agreed with Mr. Bankman-Fried and others not to publicly disclose the true nature of the relationship between Alameda and FTX, including Alameda's credit arrangement. I also understood that Mr. Bankman-Fried and others funded certain investments in amounts more than $10,000 with customer funds that FTX had lent to Alameda. The investments were done in the name of Alameda instead of FTX in order to conceal the source and nature of those funds. I am truly sorry for what I did. I knew that it was wrong. And I want to apologize for my actions to the affected customers of FTX, lenders to Alameda and investors in FTX. Since FTX and Alameda collapsed in November 2022, I have worked hard to assist with the recovery of assets for the benefit of customers and to cooperate with the government's investigation. I am here today to accept responsibility for my actions by pleading guilty.