Top FTX executives near Sam Bankman-Fried, Caroline Ellison and Zixiao “Gary” Wang, have pleaded guilty to fraud and are cooperating with prosecutors. The pair have been convicted “in connection with their roles in the fraud that contributed to FTX’s collapse,” stated Damian Williams, the US Attorney for the Southern District of New York in a press conference.
Ellison, the previous CEO of FTX sister firm Alameda Research and ex-girlfriend of Bankman-Fried, pleaded responsible to seven counts and faces as much as 110 years in jail. Former FTX co-founder Wang pleaded responsible to 4 counts and faces 50 years. Depending on the extent of cooperation, nonetheless, they may obtain lighter sentences. The pair additionally face civil fraud expenses filed by the Securities and Exchange Commission (SEC) and Commodity Future Trading Commission (CFTC). Both have been launched on $250,000 bonds.
The announcement was made as Bankman-Fried was being extradited from the Bahamas to New York, and add to his mounting authorized woes. Wang’s lawyer Ilan Graff stated that his consumer has “accepted responsibility for his actions and takes seriously his obligations as a cooperating witness,” based on The Washington Post.
Despite their cooperation, the SEC did not mince phrases in laying out its case in opposition to Ellison and Wang. “Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang were active participants in a scheme to conceal material information from FTX investors,” stated SEC deputy director of enforcement, Sanjay Wadhwa. “By surreptitiously siphoning FTX’s customer funds onto the books of Alameda, defendants hid the very real risks that FTX’s investors and customers faced.”
Bankman-Fried, in the meantime, is accused of an extended listing of misdeeds by a number of businesses, together with the SEC, Department of Justice and CFTC. Those embrace defrauding FTX buyers and clients of greater than $1.9 billion, a number of counts of wire fraud, conspiracy to defraud buyers by sharing deceptive info and “surreptitiously” siphoning buyer funds. The CFTC additionally alleges that Bankman-Fried and his cohorts “took hundreds of millions of dollars in poorly-documented ‘loans’ from Alameda,” which they then used to buy actual property and make political donations.
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