On Wednesday, the Southern District of New York, U.S. Attorney Damian Williams, announced that both Gary Wang of the FTX co-founder and Caroline Ellison, co-CEO of Alameda, pleaded guilty to federal charges.
Wang was charged with wire fraud, conspiracy to commit wire fraud, conspiracy to commit commodities fraud, and security fraud and pleaded guilty. Ellison was charged with two counts of conspiracy to commit wire fraud, two counts of wire fraud, conspiracy to commit securities fraud, conspiracy to commit commodities fraud, and conspiracy to commit money laundering.
Allegations were made the same when former FTX CEO Sam Bankman-Fried was on his way from the Bahamas to New York, facing eight federal criminal charges from prosecutors that offered plea bargains to Ellison and Wang. The pair’s plea deals were inked on Monday, the day before Bankman-Fried was initially scheduled to return to the United States following a chaotic court session in the Bahamas.
“As I said last week, this investigation is very much ongoing,” in a prerecorded message Williams stated.
The U.S. Attorney further continued, “I also said that last week’s announcement would not be our last. And let me be clear, once again, neither is today’s.”
Last week Bankman-Fried was taken into custody in the Bahamas following his summons in the Southern District of New York. He has spent a couple of days being involved in heated court proceedings for the past few days on whether or not he would consent to extradition to the United States.
At the same time, the Commodity Futures Trading Commission and Securities and Exchange Commission disclosed lawsuits against them.
The SEC purported their involvement “in a multiyear scheme to defraud equity investors in FTX, the crypto trading platform co-founded by Samuel Bankman-Fried and Wang.”
The CFTC’s expanded lawsuits claim “Ellison with fraud and material misrepresentations in connection with the sale of digital asset commodities in interstate commerce, ” charging Wang with fraud in connection with the sale of digital asset commodities in interstate commerce.”
The CFTC, in a statement, revealed that Wang and Ellison had accepted the charges levied against them. However, the SEC lawsuit singled out Ellison for manipulating FTT, crypto tokens that were self-issued, to increase the amount of financing collateral accessible to Alameda Research.
As per the SEC, Ellison and Wang have begun cooperating with the agency’s ongoing investigation.
Voyager Digital and BlockFi Lending, two significant crypto companies, recently seeking bankruptcy protection, were among the lenders tied to Alameda Research through several loans.
Regarding the accusations against Wang or Ellison, Williams remained mum. However, according to the SEC, Bankman-Fried is accused of scamming FTX clients. Ellison and Wang are also charged with helping him in their respective positions at Alameda and FTX.
The SEC claims Wang built a software backdoor into the FTX platform, enabling Alameda to use consumer money for its transactions. Before Sam Trabucco departed from Alameda in August 2022, Bankman-Fried served as the city’s mayor until 2021, when Ellison took over.
Trabucco did not immediately answer a request for a response from CNBC.
Ellison, 28, and Wang, 29, are the second and third people to be accused concerning the enormously expensive collapse of FTX. Earlier this month, a federal court indicted 30-year-old Bankman-Fried.
“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,” the SEC revealed. Trabucco, joining Alameda “in or around 2019,” as per the SEC, failed to be mentioned in connection with any criminality.
Wang’s attorney remarked in a statement, “Gary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness.”
Counsel for Ellison refrained from responding to CNBC’s request for comment. Similarly, the Bankman-Fried camp’s spokesperson avoided offering any word.
- Published By Team Australia News