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‘Holy $—-, the company is probably broke’ - FTXer recalls doomsday

By Jake Beardslee · September 25, 2023

In brief…

  • A former software engineer described realizing FTX was in serious trouble when the company credit card was declined in Hong Kong.
  • Alameda CEO Caroline Ellison tearfully confessed to misusing customer funds, implicating her one-time boyfriend, Sam Bankman-Fried.
  • Employees fled the Hong Kong office after Ellison's admission.
A former FTX software engineer has revealed when he realized the firm was insolvent. Founder Sam Bankman-Fried (above).  FTX/Wikimedia

A former software engineer at Sam Bankman-Fried’s once high-flying crypto empire FTX has revealed new details about the company’s sudden demise last November.

Aditya Baradwaj described the “exact moment” he realized FTX was in serious trouble. On November 9, 2022, as employees at Alameda Research (FTX’s sister firm in Hong Kong) waited to hear if FTX would survive a liquidity crisis, their company credit card was declined as they tried to order dinner.

“That’s the moment where we realized, holy $—-, the company is probably broke,” Baradwaj told The New York Post.

Hours later, Alameda CEO Caroline Ellison - Bankman-Fried’s one-time girlfriend - held what is now an infamous tearful meeting with staff.

“I guess, mostly I wanna say, like, I’m sorry. This really sucks,” Ellison said, according to court documents.

When asked who decided to use FTX customer funds, she allegedly implicated founder Sam Bankman-Fried, saying, “Um, Sam, I guess.”

Baradwaj described Ellison as seeming “kind” and a “good boss” prior to the downfall. But after her admissions stunned employees fled Hong Kong en masse.

Baradwaj called Bankman-Fried “definitely guilty,” noting Ellison’s confession before talking to lawyers.

FTX, Alameda and the firm’s other affiliates filed for bankruptcy days later. Bankman-Fried was arrested in the Bahamas. He faces federal charges of fraud and money laundering, to which he’s pleaded not guilty.