According to the U.S. prosecutor for the Southern District of New York, two former associates of disgraced cryptocurrency tycoon Sam Bankman-Fried have admitted to participating in a lengthy plot to mislead shareholders in FTX. This virtual currency platform went under last month. According to Manhattan U.S. Representative Damian Williams, the executives, Caroline Ellison, a former chief executive of Bankman-Fried-owned hedge fund Alameda Research, and Gary Wang, a previous chief technology officer of FTX, are working with investigators.
The announcement was made while Bankman-Fried, who had been imprisoned in the Bahamas for more than a week, was being flown to New York. Ellison and Wang’s guilty pleas served as a warning that Bankman-legal Fried’s troubles were about to get worse as prosecutors built up their case against him.
In a prerecorded video statement on Wednesday night, Williams stated that work is ongoing around-the-clock and that there is still more to be done. He reiterated a call he made when he filed suit against the former executive last week, urging others who took part in misconduct in Bankman-crypto Fried’s empire to come forward. Bankman-spokesman Fried chose not to respond to questions.
Statement of U.S. Attorney Damian Williams on U.S. v. Samuel Bankman-Fried, Caroline Ellison, and Gary Wang pic.twitter.com/u1y4cs3Koz
— US Attorney SDNY (@SDNYnews) December 22, 2022
Ellison, who ran Bankman-cryptocurrency Fried’s trading company and also happened to be his old girlfriend, pled guilty to seven counts that closely resemble Bankman-indictment. Fried’s accusations include money laundering, securities, commodities fraud, and schemes to commit wire fraud. She could spend 110 years behind bars.
Co-founder of FTX Wang entered a guilty plea to four counts of conspiracy and fraud. He might spend up to fifty years behind bars. Williams claimed that they are both assisting the Southern District of New York.
The Securities and Exchange Commission also accused Ellison and Wang of fraud on Wednesday, alleging that they assisted Bankman-Fried in misrepresenting investors while diverting FTX client funds to the hedge fund. Additionally, the agency asserts that Ellison, operating under Bankman-orders, Fried’s artificially inflated the cost of FTT, a virtual token produced by FTX that the directors used to deceive investors about the viability of their companies.
According to SEC Chair Gary Gensler, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left stockholders holding the bag when FTT and the rest of the house of cards crumbled.
One of the largest financial scams in American history is allegedly the work of Bankman-Fried. Federal authorities claim that since FTX’s launch in 2019, the company has been allegedly siphoning off customer funds it had pledged to protect and using them as an individual bank account for its top executives. These executives reportedly used the money to purchase real estate worth hundreds of millions of dollars, make risky investments, and donate sizable sums of money to political campaigns.