Caroline Ellison's The Role She Played in FTX Crash and Crypto Trading

FTX borrowed money from customer accounts to finance betting through Alameda, And Alameda had already built a reputation of being a cutthroat risk-taker. It would ruthlessly dump tokens, sell things whenever it wanted and had no control, and Caroline Ellison became the subject of online speculation. Alameda started facing losses between May and June 2022. The digital currency market was in a free fall. Panic gripped the investors. They started pulling out their funds from FTX frantically even amidst assurances from SBF and Ellison.
Alameda traded heavily on the FTX platform, meaning it sometimes benefited when FTX’s other customers lost money, a conflict of interest that Mr. Bankman-Fried sometimes seemed uncomfortable discussing in interviews
According to Caroline Ellison, FTX gave Alameda Research a lot of credit. FTX effectively extended a substantial amount of credit to Alameda Research, and in the end, that margin position became severely stressed and it blew out.”

A negative $1.31 billion margin position, as disclosed in the FTX Documents, is a massive hole. Margin positions are trades made with borrowed funds, and if the trader is unable to maintain the minimum required margin, the position is usually liquidated to repay the borrowed funds. The large margin position shared in May 2022 occurs around the same time frame as the Terra LUNA debacle

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