Alameda Research CEO Caroline Ellison allegedly paid herself millions of dollars in a single bonus payment despite knowing about massive holes in FTX’s finances.
Months before FTX filed for bankruptcy, she allegedly moved the money between various accounts until it landed in her own.
Crypto exchange FTX spectacularly imploded late last year, dragging Alameda Research, its affiliate trading firm, down with it.
Alameda itself was losing huge amounts of money thanks to high-risk bets, with FTX accused of secretly redirecting its users’ funds to its sister firm to help plug its losses.
Legal proceedings launched in the wake of FTX’s downfall have accused its top executives of gross mismanagement, including founder and CEO Sam Bankman-Fried (widely known as “SBF”).
In December, Ellison herself pleaded guilty to seven offenses, including wire fraud and money laundering.
Multimillion-dollar bonusShortly after FTX went under, it was reported that she and SBF had been aware of red flags at the crypto exchange three months before its collapse.
According to a new legal filing, however, Ellison knew about major holes in FTX’s finances eight months before the firm’s cashflow problems were made public—and instead of acting to fix the problem, she made a series of convoluted transactions to pay herself a multimillion-dollar bonus.
FTX’s latest lawsuit against SBF and his top associates—filed on Thursday—alleged that as early as March 2022, Ellison estimated FTX had a cash deficit of more than $10 billion.
The estimate, which she kept in her private notes, came just weeks after she transferred $22.5 million from Alameda to her own personal FTX account via a series of transactions through other accounts.
On March 29, she allegedly transferred $10 million of that so-called “bonus” to her personal bank account, using the funds to invest in an unnamed A.I. safety and research firm.
In the lawsuit, the money was labeled “misappropriated Debtor funds.”
Lawyers for Ellison were not available for comment when contacted by Fortune.
It was also alleged that on separate occasions between 2021 and 2022, Ellison had misused company funds to give herself other multimillion-dollar bonuses.
"No 'bonus' could possibly be justified given Ellison’s extensive misconduct," the complaint filed on Thursday said.
Eight months after Ellison's major bonus payment, FTX started voluntary Chapter 11 proceedings in the United States.
The bankruptcy filing came after Ellison’s former boyfriend SBF publicly scrambled—and failed—to raise emergency funds to plug the gaps in the company’s finances.
Until the company’s downfall, Bankman-Fried was widely respected, having cultivated an image as a philanthropist as well as a business magnate, drawing comparisons to the likes of Warren Buffett. However, the 48-hour demise of FTX left his reputation in tatters.
SBF took a massive personal financial hit from the firm’s collapse, with his entire $16 billion fortune wiped out, according to Bloomberg, marking one of the greatest destructions of wealth in history.
At the peak of his fortune, the 31-year-old had a net worth of $26 billion.
Ellison found CEO role ‘overwhelming’Ellison—who was just 28 years old when FTX and Alameda imploded—also built up a huge fortune during her tenure at the helm of Alameda.
According to FTX bankruptcy filings, she received $6 million in payments and loans over the life of the collapsed cryptocurrency exchange, and was reported to have had a net worth of $15 million by the time the company collapsed.
However, it emerged on Thursday that Ellison had little faith in her own ability to run the company.
“Running Alameda doesn’t feel like something I’m that comparatively advantaged at or well suited to do,” she said in a diary entry seen by the New York Times.
“I have been feeling pretty unhappy and overwhelmed with my job,” she added. “At the end of the day I can’t wait to go home and turn off my phone and have a drink and get away from it all.”
In a December hearing, Ellison told a judge that she “knew that [what she had done] was wrong.”
Asked if she knew her actions were illegal, Ellison replied: “Yes.”
Before entering her guilty plea and agreeing to cooperate with authorities, Ellison was reportedly facing a 110-year prison sentence for her crimes.
Legal proceedings are still underway.
This story was originally featured on Fortune.com
More from Fortune: 5 side hustles where you may earn over $20,000 per year—all while working from homeLooking to make extra cash? This CD has a 5.15% APY right nowBuying a house? Here's how much to saveThis is how much money you need to earn annually to comfortably buy a $600,000 homeClick Here To Get Funded!