- Caroline Ellison and Gary Wang have pleaded guilty to various charges regarding FTX
- The pair are working with authorities, presumably helping dish the first on Sam Bankman-Fried
- The duo also face charges from the SEC and CFTC
Two individuals connected to FTX and its disgraced founder Sam Bankman-Fried have pleaded guilty to fraud-related charges as part of an investigation into the collapse of the exchange. Gary Wang, a co-founder of FTX, and Caroline Ellison, the former CEO of Alameda Research, have agreed to cooperate with authorities in their ongoing investigation, while Bankman-Fried himself prepares to face a U.S. judge for the first time.
Latest Charges but Not the Last
Ellison and Wang were already under the microscope following FTX’s collapse, and it seems interest in them has been justified – both have pleaded guilty to various crimes related to the fraudulent operation of FTX and Alameda and are cooperating with authorities (read: throwing Bankman-Fried under the bus). U.S. attorney for New York’s Southern District, Damian Williams, revealed the news yesterday, where he also said that the current round of charges would not be the last in the FTX case:
Statement of U.S. Attorney Damian Williams on U.S. v. Samuel Bankman-Fried, Caroline Ellison, and Gary Wang pic.twitter.com/u1y4cs3Koz
— US Attorney SDNY (@SDNYnews) December 22, 2022
The pair’s bad day didn’t end there – the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) yesterday announced charges of their own against them. The SEC alleges that the two individuals manipulated the price of the FTT token in order to prop up the value of Alameda and FTX, and they are also accused of misusing FTX customer assets to prop up Alameda, the FTX’s crypto hedge fund which Ellison fronted, and posting collateral for margin trading.
All up, both Ellison and Wang face a maximum prison stay of 160 years in prison and fines stretching into the tens of millions.
Bankman-Fried Set to Appear Before Judge
Meanwhile, Bankman-Fried himself, having agreed to extradition, is expected to appear before a U.S. judge today for the first time, having flown from a private airfield near Nassau’s airport. The co-founder and former CEO of FTX faces multiple charges including wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering.
It is not yet known how he will plead, but since he has already suggested that the entire thing was simply a mistake, it is likely he will plead not guilty, although a plea deal is in the offing down the line.