FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison pleaded guilty to fraud charges against them in regard to the FTX and Alameda crash.
The U.S. Attorney Damian Williams for the Southern District of New York (SDNY) announced Ellison and Wang have pleaded guilty to the charges, and both are cooperating with the SDNY.
Williams stated, “As I said last week, this investigation is ongoing and moving very quickly. I also said last week’s announcement would not be our last and let me be clear once again, neither is today’s.”
“Let me reiterate a call that I made last week. If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it. We are moving quickly, and our patience is not eternal,” Williams added.
FTX founder Sam Bankman-Fried is currently in the Federal Bureau of Investigation (FBI) custody. Williams also stated that SBF is “on his way back to the United States” and would be taken directly to the SDNY to make a court appearance.
The United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) also filed charges against Ellison and Wang.
The SEC filing alleges that between 2019 and 2022, Ellison fostered the scam at Bankman-Fried’s request by manipulating the price of the FTT token by acquiring it in big quantities on the open market to support its price.
According to the complaint, Bankman-Fried and Ellison artificially raised the value of Alameda’s FTT assets, which in turn raised the value of collateral on Alameda’s balance sheet and deceived investors about FTX’s risk exposure.
The complaint also claims that Ellison and Wang actively participated in the plot to defraud FTX’s investors and took actions that were essential to the scheme’s success.
According to the SEC, Wang wrote the software code for FTX that enabled Alameda to redirect FTX client funds, and Ellison used those funds for Alameda’s trading activities.
In CFTC’s amended complaint, Wang is accused of fraud in connection with the sale of digital asset commodities in interstate commerce, and Ellison is accused of fraud and substantial misrepresentations in connection with the sale of digital asset commodities.
Last week, SBF denied being part of the ‘Wirefraud’ Chat Group before his arrest. Reportedly “Wirefraud” was a chat group including Gary Wang, FTX engineer Nishad Singh, and Caroline Ellison who used it to send secret information about FTX and Alameda’s operations during its failure.
Also Read: Sam Bankman-Fried Signs Extradition Papers Clearing the Confusion
