Caroline Ellison and Gary Wang Hit With Fraud Charges by CFTC and SEC, Plead Guilty to SDNY Charges
- Former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang have pleaded guilty for their involvement in FTX defrauding customers and investors.
- Ellison has entered into a plea agreement with the SDNY, which will not prosecute her for most of her crimes if she cooperates with their investigation into SBF and FTX.
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Former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang have pleaded guilty to fraud charges connected to the collapse of FTX, U.S. Attorney Damian Williams said on 22 December.
According to the announcement, the charges Ellison and Wang pleaded guilty to were filed by the Southern District of New York (SDNY), and while the charges were not revealed, Williams revealed that the two were cooperating with the SDNY’s investigation into the collapse of FTX. Williams also confirmed that the former CEO of FTX, Sam Bankman-Fried (SBF), was now in the custody of the Federal Bureau of Investigation (FBI) and was “on his way back to the United States”, where he would appear before a judge “as soon as possible”.
Ellison and Wang were also hit by separate fraud charges by the U.S. Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) for their participation in a “multiyear scheme to defraud equity investors in FTX”. While the agencies continue investigate whether the two had broken other securities laws, they alleged that Ellison was actively involved in manipulating the price of FTX Token (FTT) by “purchasing large quantities on the open market to prop up its price” between 2019 and 2022.
Wang, on the other hand, was charged with “fraud in connection with the sale of digital asset commodities in interstate commerce”, with both the CFTC and SEC alleging he created the FTX software that allowed Alameda Research to easily divert customer funds from the exchange.
Ellison’s plea agreement revealed that she will not be prosecuted criminally — except for possible tax violations connected to wire and commodity fraud from commingling customer funds — if she fully cooperates with law enforcement agencies. She will also be permitted a $250,000 bail, and forced to surrender all of her travel documents.
- The New York Jurors took 4 fours of deliberating before pronouncing the former FTX CEO guilty of all seven charges of fraud and conspiracy to commit fraud.
- Bankman-Fried will now have to appear in court on 28 March, 2024, where he will face a potential maximum sentence of 115 years in prison.
Former CEO of FTX Sam Bankman-Fried leaves the Federal Court in New York after pleading not guilty, 3 January, 2022.
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- A little over $13 million in altcoins were sent to crypto exchanges Binance and Coinbase in the past 24 hours, which is in accordance with a September court order.
- The court ordered a phased liquidation process, which allows the bankruptcy estate to sell $3.4 billion worth of digital assets over a certain period of time.
- Joseph Pimbley, a member of litigation consulting firm PF2 Securities, will try to rebuff testimonies from Caroline Ellison, Gary Wang, Nishad Singh, and Adam Yedidia.
- During his testimony Pimbley will try to establish a timeline for the FTX-Alameda line of credit, and convince the jury it fluctuated between $1 billion and $3 billion between 2021 and 2022.