A secret copy of the Alameda shows the exact moment the employees learned about the FTX deposit

The 75-minute secretly recorded audio clip of Caroline Ellison, 15 former Alameda research employees, shows the exact moment they discovered the business was “borrowing” users' money from FTX.

The full-length footage obtained by Cointelegraph offers new insights into the emotional stress Ellison and the Alameda crew felt in the lead-up to the FTX collapse.

“Alameda would borrow a lot of money through open-ended loans and use that to make various illegal investments. So, like FTX and FTX US equity […] Most of Alameda's loans are called to fulfill those memories,” Ellison explained at a multidisciplinary meeting in Hong Kong on November 9, 2022.

“We borrowed a lot of funds from FTX, which left FTX with a shortage of user funds.”

“[FTX] “Basically, Alameda allows you to borrow money from consumers,” she told the 15 or so employees at the meeting.

On Oct. 12, during the eighth day of Sam Bankman-Fried's criminal trial, selected portions of the audio recording were played before the court, which were part of the testimony of Christian Drapey, a former software engineer in Alameda.

Drapey's appearance on the witness stand came after nearly three days of Ellison's testimony. Prior to the meeting, Drapey and several other Alameda employees had no idea that the hedge fund was using FTX client deposits to boost its business.

In the recording, Alameda is heard asking Drapey Ellison when he found out about FTX's misuse of user deposits and who knew about it at the company.

At first Ellison declined to answer, but Drappy pressed again:

I'm sure that wasn't like a YOLO thing, was it?”

Related: Changpeng Zhao's tweet ‘contributed' to FTX collapse, says Carolyn Ellison

Court records show that playback of this audio led to one of the funniest moments in court, when Drappi had to explain the word “YOLO” to everyone present, saying he wanted Ellison to confirm his use. The FTX deposit was not just a “spontaneous” decision.

In his testimony, Drapey also described Ellison's demeanor at the meeting as “submerged” and lacking confidence in the Alameda staff. He said he was “surprised” to find out about the extent of the relationship between FTX and Alameda and quit the next day.

Aditya Baradwaj, an Alameda research engineer who attended the meeting, told Cointelegraph that the session was “very tense,” with Ellison revealing a lot of new information that “hadn't been discussed internally” — including the purchase that was later abandoned. FTX's biggest competitor at the time, Binance.

“It became clear that there was no future for the company and we all had to leave. And we did that immediately,” Baradwaj said.

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