Caroline Ellison told a judge that FTX executives secretly borrowed billions from Alameda Research, report says

Caroline Ellison said FTX executives received billions in hidden loans from Alameda Research, according to a transcript of her plea hearing seen by Reuters.

The former Alameda CEO said that she agreed with Sam Bankman-Fried to hide from FTX investors, lenders, and customers that the trading platform could borrow unlimited sums from Alameda, Reuters reported.

Ellison told US District Judge Ronnie Abrams in Manhattan federal court that they "prepared certain quarterly balance sheets that concealed the extent of Alameda's borrowing and the billions of dollars in loans that Alameda had made to FTX executives and to related parties," according to the news agency.

Ellison, Bankman-Fried's ex-girlfriend, pleaded guilty to seven charges on December 19, carrying up to 110 years in prison after striking a plea deal with the Justice Department. The court unsealed the transcript of her plea hearing on December 22.

FTX cofounder Gary Wang also pleaded guilty. The plea deals that they both have struck with federal prosecutors in New York freed them each on bonds of $250,000. Ellison and Wang are now cooperating with prosecutors as part of their plea agreements.

Wang said during his plea hearing on December 19 that he was directed to change FTX code to give Alameda special privileges on the trading platform.

Ellison has agreed to waive any defenses to the charges. Per her deal with prosecutors, she also agreed to pay restitution that is yet to be determined. She must also provide documents, records, and evidence to prosecutors, as well as testify to a grand jury or at court trials when requested.

A lawyer for Ellison did not immediately respond to a request for comment from Insider.

In November, Reuters reported that Bankman-Fried secretly moved $10 billion in FTX customer funds to Alameda Research. Up to $2 billion is still missing, sources told the news agency.

Bankman-Fried told Reuters the sum was not "secretly" transferred: "We had confusing internal labeling and misread it."

FTX filed for Chapter 11 bankruptcy protection on November 11 after it imploded, wiping out customer deposits worth billions. Bankman-Fried resigned as CEO the same day.