FTX founder Bankman-Fried’s colleagues plead guilty to fraud | crypto

Gary Wang and Caroline Ellison have agreed to cooperate with authorities, according to US prosecutors.

Two of FTX founder Sam Bankman-Fried’s colleagues have pleaded guilty to fraud-related charges in connection with the collapse of the cryptocurrency exchange, according to US authorities.

FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison have admitted to the charges and have agreed to cooperate with authorities in their ongoing investigations, U.S. Attorney for the Southern District of New York Damian Williams said in a statement. release. communicated late on Wednesday.

Williams did not specify what charges Wang and Ellison pleaded guilty to, but said the announcement would not be the last his office makes regarding its investigation into FTX.

“Let me reiterate a call I made last week. If you engaged in misconduct at FTX or Alameda, now is the time to come forward. We are moving quickly and our patience is not eternal,” Williams said.

“We continue to work 24 hours a day and we are far from finished,” he added.

In separate announcements Wednesday, the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) announced civil charges against Ellison and Wang.

“As part of their deception, we allege that Caroline Ellison and Sam Bankman-Fried planned to manipulate the price of FTT, a cryptosecurity token exchange that was an integral part of FTX, to prop up the value of its house of cards,” the El said. SEC Chairman Gary Gensler.

“We further allege that Ms. Ellison and Mr. Wang played an active role in a scheme to misuse FTX client assets to prop up Alameda and post collateral for margin trading. When FTT and the rest of the house of cards collapsed, Bankman-Fried, Ellison and Wang left the investors with the stock. Until crypto platforms comply with time-tested securities laws, risks to investors will persist.”

The SEC said that Ellison and Wang were cooperating with their ongoing investigations.

CFTC Chairman Rostin Behnam said the agency had moved “aggressively to hold all individuals who commit fraud accountable and protect clients from further damage and loss.”

“In the absence of a comprehensive regulatory framework on digital assets, the CFTC will use all of its existing power and authority to protect all market participants, while ensuring the integrity of commodity markets,” Behnam said.

The announcements came shortly after Bankman-Fried left the Bahamas following his extradition to the US, where he faces eight charges including wire fraud, money laundering and campaign finance violations.

An attorney for Bankman-Friend declined to comment.

Bankman-Fried, who once ranked as the world’s richest millennial after Mark Zuckerberg, was arrested in the Caribbean nation last week after US authorities announced charges for what prosecutors described as “one of the biggest financial frauds in the history of the United States”.

Among other alleged wrongdoing, Bankman-Fried is accused of stealing FTX client deposits to finance risky bets from Alameda, an affiliated trading company, and political donations.

Bankman-Fried’s arrest capped a stunning fall from grace for the 30-year-old former cryptocurrency golden boy, who has courted celebrity endorsers including Seinfeld creator Larry David and NFL star Tom Brady, and was counted among the most well-connected. donors in Washington, DC.

The collapse of FTX, once valued at $32 billion, has fueled skepticism about the reliability of cryptocurrencies, prompting calls for stricter regulation and raising questions about the future of virtual assets in general.

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