Associates of FTX Founder Sam Bankman-Fried Plead Guilty to Wire Fraud and Other Charges Filed by SEC

Two former partners of FTX founder Sam Bankman-Fried have pleaded guilty to charges of National Stock Market Commission (SEC) filed a lawsuit 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 along with Bankman-Fried.

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

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

A split photo of Sam Bankman-Fried and Caroline Ellison

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

Damian said it was possible that more criminal charges could be brought against others.

The surprise guilty pleas came just hours after the charges were initially announced and around the same time that Bankman-Fried landed in NY after he was extradited from the Bahamas.

His extradition comes amid criminal charges that US police filed against him related to his role in the FTX failure. He was expected to appear in federal court in New York City on Thursday.

FTX's Sam Bankman-Fried arrives at the Bahamas court building

FTX founder Sam Bankman-Fried, center, is escorted from a Department of Corrections van as he arrives at the Magistrate Court building for a hearing in Nassau, Bahamas, Wednesday, December 21, 2022. (AP Photo/Rebecca Blackwell/AP News Room)

FTX FOUNDER SAM BANKMAN-FRIED AGREES TO BE EXTRADITED TO US, WHERE HE FACES CRIMINAL CHARGES

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

His extradition to the US was ordered by a Bahamian judge and the 30-year-old suspect agreed to it as part of a “desire to make relevant clients whole,” Reuters reported. He is expected to appear in federal court in NY Thursday.

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

WHAT BANKMAN-FRIED’S LAWYERS WILL LIKELY TO ARGUMENT IN THEIR DEFENSE

FTX logo

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

On December 19, Ellison and Wang entered into plea agreements in exchange for the promise of a reduced sentence, should they fully cooperate in the investigation.

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Without such an agreement, Ellison could face up to 110 years in prison. Wang could get up to 50 years.

US Attorney Damian Williams

US Attorney Damian Williams speaks during a news conference regarding the criminal charges filed against FTX founder Sam Bankman-Fried, Tuesday, December 13, 2022, in New York. (AP Photo/Julia Nikhinson/AP News Room)

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

Prosecutors argue that Bankman-Fried illegally diverted client deposits from the FTX platform to bolster his personal wealth and enable Alameda commerce, purchase real estate and make large campaign donations to US politicians.

Associated Press contributed to this report.

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