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Published September 24, 2023, 12:48 PM ET
Aditya Baradwaj can pinpoint the “exact moment” when he knew the party was over for Sam Bankman-Fried and his once-booming FTX cryptocurrency empire.
The scruffy, 31-year-old crypto boss had showered workers like Baradwaj, a former software engineer at FTX’s sister company Alameda Research, with a torrent of lavish perks in late 2021 and 2022 – only to close the $32 billion company last November to overthrow the bankruptcy.
On November 9, while waiting to hear from their bosses about whether FTX would survive, Baradwaj and other employees crowded into Alameda’s Hong Kong office tried to order takeout with a credit card – “probably a poke bowl or fried rice.” , he said.
The transaction was rejected.
“We ordered our lunch in the afternoon as usual,” Baradwaj told The Post. “When we wanted to order our food in the evening, the message ‘credit card declined’ came up in the app. At that moment we realized the company was probably bankrupt.”
A few hours later, Caroline Ellison — CEO of Alameda Research and also Bankman-Fried’s ex-mistress — showed up for the first time in two days to a tense, tearful meeting of all parties involved, now expected to play a crucial role in a federal trial next There will be a trial next month in which the disgraced FTX boss will be charged with allegedly stealing billions of dollars in customer funds.
Aditya Baradwaj (pictured) spent about a year as a software engineer at Alameda Research.
“We were scared,” Baradwaj said. “This thing made international headlines. My friends and family have been calling me, I’m getting all these calls. I’m sitting in a hotel in Hong Kong and I don’t want to be thrown into Chinese prison.”
Baradwaj, who first detailed his experience in an exclusive interview with The Post, was in the room with Ellison when she staged her now-infamous call to employees.
As people in the Hong Kong office sat in a circle around her, some sitting on bean bags and others listening via video conference, Ellison burst into tears.
“I think most of the time I want to say, I’m sorry. This really sucks,” Ellison sobbed, according to court documents. “I think my current standard plan is that Alameda will likely be wound up once we can repay all of our creditors and settle a number of our remaining obligations.”
Aditya Baradwaj said a company’s credit card was declined just before an important all-hands meeting.
An Alameda employee asked Ellison, “Who made the decision about the use?” [FTX] User deposits?” She is said to have replied: “Um…Sam, I think.”
After the meeting, Baradwaj said he and his stunned colleagues “literally had to book our flights and leave the country.” The next day he resigned, bought a plane ticket home and left Hong Kong.
“Mr. Bankman-Fried maintains his innocence and looks forward to his day in court,” Bankman-Fried spokesman Mark Botnick said in a statement.
Caroline Ellison was CEO of Alameda Research.Twitter / @carolinecapital
Ellison’s legal team did not respond to the Post’s request for comment.
The first clear signs of serious financial problems at FTX had emerged a week earlier, on November 2, when a leaked financial statement from Alameda Research raised questions about the empire’s solvency and ultimately triggered a flood of withdrawals, according to Baradwaj.
In the days leading up to the meeting, the 28-year-old Ellison – now known for her alleged experiments with polyamory and her love of “Harry Potter” – had sent a series of increasingly urgent messages urging Alameda traders to withdraw capital from other exchanges Make sure FTX can handle withdrawals.
“There was a kind of urgency in her tone when she said that that none of us had ever really seen in her before. We could tell something was going on,” Baradwaj said. “We have never actually had to withdraw capital from the exchanges we trade on and essentially stop trading on them just to be able to do something else.”
Caroline Ellison allegedly blamed Sam Bankman-Fried for the decision to misuse FTX customer funds.
In fact, Baradwaj, who was working with Ellison in Hong Kong at the time, said that up until that point she had “seemed like a friendly person” and had been a good manager. Ellison was forgiving of mistakes and tried to make the company a “nice social environment,” Baradwaj said.
“My opinion of Caroline – right up until the end, when she gave us that confession and told us what they had done – my impression from here was that she was a good boss,” Baradwaj said. “She seemed like a friendly person.”
Less than a week later, on November 8, employees were surprised by Bankman-Fried’s announcement on Twitter that rival platform Binance had offered to buy FTX to solve its “liquidity crisis.” Binance later withdrew from the rescue agreement.
Sam Bankman-Fried will be indicted on federal fraud charges in October.AP
On the day of the meeting, Baradwaj and other employees sat around the office doing “nothing” because they lacked the available capital to trade and lacked guidance from Bankman-Fried and his inner circle on their next move.
“There was one central event in my mind, which was Caroline’s confession,” Baradwaj said.
“After that meeting, we all left the office and never spoke to Caroline again after that,” he added. “Caroline even tried to strike up a conversation with someone but she was ignored. Nobody even wanted to talk to her.
“This is even more true for Sam,” he added.
Sam Bankman-Fried has pleaded not guilty and maintains his innocence.Portal
FTX, Alameda and countless other subsidiaries filed for bankruptcy two days later on November 11th, beginning the chain of events that ultimately led to Bankman-Fried’s arrest in the Bahamas and an indictment on charges of securities fraud, money laundering and violations led to campaign financing. He has pleaded not guilty.
“He is definitely guilty,” Baradwaj said. “We know he’s guilty because Caroline basically said so, and this was mid-November, like in the heat of the moment, before she had spoken to any lawyers, even before the bankruptcy. She confessed to us and there is a recording of the confession.”
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