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Associates of FTX founder plead guilty to fraud charges

Associates of FTX founder plead guilty to fraud charges

Associates of FTX founder plead guilty to fraud charges

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Two former high-profile associates of FTX co-founder Sam Bankman-Fried have pleaded guilty to federal criminal fraud charges and are cooperating with investigators, prosecutors said Wednesday, the same day the disgraced entrepreneur of the crypto market was extradited to the United States to face his own criminal charges. .

Carolyn Ellison, the former CEO of Alameda Research, a trading company founded by Bankman-Fried, and FTC co-founder Gary Wang, pleaded guilty to charges of wire fraud, securities fraud and fraud on raw materials.

“They are both cooperating with the Southern District of New York,” U.S. Attorney Damian Williams said in a statement late Wednesday. Twitter.

The calls come as US authorities conduct investigations into the crypto exchange’s dramatic collapse. The pleas are expected to increase pressure on Bankman-Fried, who returned to the United States from the Bahamas and is scheduled to appear in federal court in Manhattan on Thursday.

“If you participated in a foul at FTX or Alameda, now is the time to get ahead,” Williams said. “We are moving fast and our patience is not eternal.”

Bankman-Fried was arrested in the Bahamas earlier this month on eight counts of conspiracy and criminal activity related to wire fraud, commodity fraud, securities fraud, money laundering and violation of campaign finance laws.

Separately, the U.S. Securities and Exchange Commission has filed civil lawsuits against Bankman-Fried for allegedly violating securities law and “orchestrated a scheme to defraud investors in FTX Trading Ltd stock.”

Bankman-Fried, also known as SBF, resigned as CEO of FTX in November after the beleaguered cryptocurrency platform filed for Chapter 11 bankruptcy protection. The Bahamas-based exchange was one of the biggest players in cryptocurrency, and Bankman-Fried was known for lobbying politicians on both sides of the aisle. But the collapse of FTX raised doubts about the cryptocurrency and left customers wondering if they would ever get their money back.

The revelations about the holdings and close relationship between FTX and sister trading firm Alameda Research – more than a third of assets on Alameda’s balance sheet were FTT tokens issued by FTX – triggered a cascading series of events. November which led Alameda to cease operations. and FTX to file for bankruptcy protection. Billions in investor funds seemingly disappeared overnight.

“I was the CEO of FTX. That means I was in charge,” Bankman-Fried said during a live interview at The New York Times’ Dealbook Summit on Nov. 30. He denied any criminal act or criminal intent.

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