Alameda Research ex-CEO Caroline Ellison has now retained a former top crypto regulator for the US Securities and Exchange Commission as the federal investigation into the downfall of FTX continues.
- Caroline Ellison has hired Stephanie Avakian and the law firm WilmerHale to represent her in the FTX investigation, according to Bloomberg.
- Avakian was a top regulator at the SEC, where she increased oversight of crypto.
- She also led major cases against firms like Theranos, Tesla, Wells Fargo, and Facebook, among others.
Bloomberg first reported the announcement stating that Ellison hired Stephanie Avakian, chair of the securities and financial services department at law company WilmerHale and the SEC’s former enforcement director. Reliable sources close to this matter told Bloomberg that Avakian, and fellow WilmerHale lawyers, will be representing Ellison in the FTX investigation.
During her tenure at the SEC between 2016 and 2022, Akavian led an impressive team that worked on multiple high-profile cases against major firms and notable public figures. They include Elon Musk for tweeting misleading statements about a purported plan to take Tesla private, Elizabeth Holmes for making false allegations to investors to raise $700 million for Theranos, and Facebook for intentionally misleading investors about the risks of misusing user data.
Akavian was also instrumental in increasing crypto regulation while at the SEC, resulting in cases against firms like Ripple Lab and Robinhood.
WilmerHale and Avakian are set to represent Ellison during the federal probe into her former establishment, Alameda Research, the trading company and corporate sibling of the fallen FTX crypto exchange.
Before FTX filed for bankruptcy in November, Alameda borrowed $3.3 billion worth of funds from the crypto exchange and lent them to FTX founder Sam Bankman-Fried and firms he controlled to cover losses and make some risky bets, according to court documents.
So far, Ellison has remained an elusive figure in the collapse of FTX, staying silent and majorly unreachable during its collapse. As noted by Bloomberg, while Bankman-Fried has publicly placed most of the blame on Alameda in many interviews, Ellison has remained silent. Some people have speculated that she might be cutting a deal and cooperating with authorities, according to New York magazine.
The Senate Banking Committee stated earlier this week that in case Bankman-Fried does not appear before legislators in the coming week to testify, he will automatically be subpoenaed. Sherrod Brow, Senate Banking Chairman, said in a public statement on December 6 targeting the former billionaire:
“As the Founder and CEO of FTX Trading Ltd. at the time of its collapse and the founder, principal owner, and former CEO of Alameda Research, you must answer for the failure of both entities that was caused, at least in part, by the clear misuse of client funds and wiped out billions of dollars owed to over a million creditors.”
