FTX Co-Founder, Former Alameda Research CEO Both Plead Guilty to Federal Charges


Caroline Ellison, the former CEO of cryptocurrency hedge fund Alameda Research, and Gary Wang, a co-founder of crypto exchange FTX, have pleaded guilty to federal criminal fraud charges and are cooperating in the prosecution of Sam Bankman-Fried, the founder of both Alameda and FTX. The two were key lieutenants in Bankman-Fried's international business empire and were charged by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) with civil fraud on Wednesday.

Plead Guilty To Criminal Charges
Source: DYORspot.com

Bankman-Fried, who is accused of orchestrating a widespread fraud that led to the bankruptcy of FTX, is in U.S. custody after agreeing to be extradited from the Bahamas to face trial in New York. Ellison pleaded guilty to seven counts, including conspiracy to commit wire fraud and securities fraud, and could face a maximum sentence of 110 years in prison if found guilty. Wang pleaded guilty to four counts, including conspiracy to commit wire fraud and commodities fraud, and could face up to 50 years in prison.

The SEC has also labeled FTX's token, FTT, as a security, stating that it was sold as an investment contract and that the demand for the token was closely tied to the success of the exchange. In addition, the SEC and CFTC have brought charges against Bankman-Fried and FTX for fraud and misappropriation, alleging that Bankman-Fried used customer funds for personal expenses and made false and misleading statements to customers and lenders. Bankman-Fried and FTX have denied the allegations.

The guilty pleas and cooperation agreements by Ellison and Wang are a significant development in the case against Bankman-Fried, who is now in an even more perilous legal position with the combined criminal and civil charges against him. The U.S. Attorney for the Southern District of New York, Damian Williams, has called on those involved in misconduct at FTX or Alameda to come forward, stating that "we are moving quickly, and our patience is not eternal."

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