Associates of FTX founder Sam Bankman-Fried plead guilty to wire fraud, other charges filed by SEC

Two former associates of FTX founder Sam Bankman-Fried have pleaded guilty to charges of Security and Exchange Commission (SEC) filed against them on Wednesday as part of a multi-year scheme to defraud investors.

Former Alameda Research CEO Caroline Ellison, 28, and former FTX Trading LTD CTO Zixiao (Gary) Wang, 29, secretly pleaded guilty to charges including wire fraud, securities fraud and commodity fraud.

Wang also co-founded FTX alongside Bankman-Fried.

“They are both cooperating with the Southern District of New York,” U.S. Attorney Damian Williams said late Wednesday, referring to Ellison and Wang.

FTX FOUNDER SAM BANKMAN-FRIED LANDS IN NEW YORK AFTER EXTRADITION FROM THE BAHAMAS

A shared photo of Sam Bankman-Fried, the FTX logo, and former Alameda Research CEO Caroline Ellison, who are both facing charges amid FTX’s collapse. (Getty Images/Getty Images)

Damian said further criminal charges against others are possible.

The surprise guilty pleas came just hours after the charges were initially announced and around the same time Bankman-Fried landed in New York after being extradited from the Bahamas.

His extradition comes amid criminal charges against him by US law enforcement related to his role in the failure of FTX. He was scheduled to appear in federal court in New York on Thursday.

FTX's Sam Bankman-Fried Arrives at Bahamas Courthouse

FTX founder Sam Bankman-Fried, center, is escorted by a Corrections Department van as he arrives at the Magistrate’s Court building for a hearing, in Nassau, Bahamas, Wednesday, Dec. 21, 2022. (AP Photo/Rebecca Blackwell/AP Newsroom)

FTX FOUNDER SAM BANKMAN-FRIED AGREES TO EXTRADED TO US WHERE HE FACES CRIMINAL CHARGES

Bankman-Fried faces multiple criminal charges from the Southern District of New York and the SEC, including conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity fraud, conspiracy to commit securities fraud, conspiracy to launder money and conspiracy to defraud the Federal Election Commission and commit campaign finance violations.

His extradition to the United States was ordered by a Bahamian judge and was agreed to by the 30-year-old suspect as part of a “desire to make the affected clients whole”, Reuters reported. He is expected to appear in federal court in New York City Thursday.

The charges against Ellison and Wang were not made public until Bankman-Fried left. the Bahamas.

WHAT BANKMAN-FRIED PROSECUTORS WILL LIKELY BE LASTING IN HIS DEFENSE

FTX logo

The FTX logo on a computer screen laid out in Barcelona, ​​Spain, Tuesday, November 15, 2022. (Angel Garcia/Bloomberg via Getty Images/Getty Images)

On December 19, Ellison and Wang signed plea agreements in exchange for a promise of reduced sentences, if they fully cooperate with the investigation.

CLICK HERE TO LEARN MORE ABOUT FOX BUSINESS

Without such a deal in place, Ellison could face up to 110 years in prison. Wang could get up to 50 years old.

U.S. Attorney Damian Williams

U.S. Attorney Damian Williams speaks during a news conference regarding criminal charges against FTX founder Sam Bankman-Fried on Tuesday, Dec. 13, 2022, in New York City. (AP Photo/Julia Nikhinson/AP Newsroom)

FTX, once a premier cryptocurrency exchange, filed for Chapter 11 bankruptcy in November along with Alameda Research, West Real Series and 130 affiliates following FTX’s public collapse.

Prosecutors allege that Bankman-Fried illegally misappropriated deposits from FTX platform clients to build his personal wealth and enable Alameda trading, purchase real estate and make huge campaign donations to US politicians.

The Associated Press contributed to this report.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top