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FTX: On Wednesday, Gary Wang, a co-founder of FTX, and Caroline Ellison, a former co-CEO of Alameda Research, pleaded guilty to federal charges.
The charges
US Attorney Damian Williams states that the two FTX associates pleaded guilty in the Southern District of New York.
The following offenses were those to which Gary Wang pleaded guilty:
- Conspiracy to commit wire fraud
- Wire fraud
- Conspiracy to commit commodities fraud
- Conspiracy to commit securities fraud
However, Caroline Ellison was also charged with the following offenses:
- Two counts of wire fraud
- Two counts of conspiracy to commit wire fraud
- Conspiracy to commit commodities fraud
- Conspiracy to commit securities fraud
- Conspiracy to commit money laundering
The night before Sam Bankman-Fried, the former CEO of FTX, was supposed to fly from the Bahamas to New York, their charges were made public.
The same federal prosecutors who accepted the plea agreements for Ellison and Wang are prosecuting him for eight felony charges.
Just in time for SBF’s scheduled departure for the US following a heated court session in the Bahamas, their plea agreements were finalized on Monday.
“As I said last week, this investigation is very much ongoing,” said Williams in a prerecorded message.
“I also said that last week’s announcement would not be our last. And let me be clear, once again, neither is today’s.”
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SBF
After being apprehended in the Bahamas the week before, Sam Bankman-Fried was charged in the Southern District of New York.
His willingness to be extradited to the US has been the subject of a court dispute over the last few days.
He was detained in the Bahamas after a protracted court session on Monday in which he failed to prevent his extradition to the US.
He reportedly instructed his Bahamian attorney to begin the extradition process later that day.
Sam Bankman-Fried will appear in court once again this week.
According to earlier reports, he initially agreed to extradition, but SBF on Monday voiced a different opinion.
He insisted on seeing a copy of his federal indictment before agreeing to return to the United States.
Bankman-Fried, however, decided to go to jail rather than surrender to US authorities.
The SEC
The Securities and Exchange Commission and the Commodity Futures Trading Commission are pursuing legal action against Gary Wang and Caroline Ellison.
The SEC alleges that Wang and Samuel Bankman-Fried were behind a “multiyear conspiracy to mislead equity investors,” the emphasis of which was the cryptocurrency trading platform FTX.
The CFTC’s expanded complaint makes the following claims:
“Ellison with fraud and material misrepresentations in connection with the sale of digital asset commodities in interstate commerce.”
Wang is charged with fraud “in connection with the selling of digital asset commodities in interstate commerce,” according to the indictment.
According to the CFTC statement, Wang and Ellison are alleged to have agreed to the accusations made against them.
Caroline Ellison was singled out for wilfully manipulating FTT (FTX’s self-issued token) to enhance Alameda Research’s loanable collateral.
The SEC claims that Ellison and Wang are cooperating in the investigation.
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FTX and Alameda
Alameda Research was linked to numerous loans from well-known cryptocurrency companies that filed for bankruptcy, most notably Voyager Digital and BlockFi Lending.
Damian Williams avoided going into specifics on the charges levied against Wang and Ellison.
According to the SEC, they reportedly assisted Sam Bankman-Fried in defrauding FTX clients while doing their duties at Alameda and FTX.
Alameda is charged with exploiting the FTX platform as a backdoor Wang incorporated into the software to access customer funds.
Sam Bankman-Fried presided over Alameda until Caroline Ellison and Sam Trabucco assumed charge in 2021 (Trabucco departed the company in August 2022).
Ellison, 28, and Wang, 29, were the second and third suspects in the FTX collapse, respectively.
Sam Bankman-Fried, 30, was charged with a federal offense this month.
“Bankman-Fried and Wang thus gave Alameda and Ellison carte blanche to use FTX customer assets for Alameda’s trading operations and for whatever other purposes Bankman-Fried and Ellison saw fit,” said the SEC.
They argued that there was no misconduct associated with Trabucco.
Then Wang’s attorney said the following:
“Gary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness.”
References:
FTX founder Bankman-Fried sent back to Bahamas jail in day of courtroom chaos
