Two senior FTX executives pleaded guilty to the bankruptcy of the platform

Two senior FTX executives have pleaded guilty to the bankruptcy of the platform. (REUTERS/Dado Ruvic/Illustration) (DADO RUVIC/)

Two senior executives associated with the crypto asset exchange platform FTX they pleaded guilty to charges related to their role in the bankruptcy of the company.

federal prosecutor damian williamsfrom the southern district of NYannounced Wednesday that Caroline Ellison, former CEO of Alameda ResearchY Gary Wangco-founder of FTXhad pleaded guilty to charges related to their role in the bankruptcy of the company, it has been reported ‘The Hill’.

Carolyn Ellison, former CEO of Alameda Researcha business venture started by Bankman-Fried, 28, and FTX co-founder Gary Wang, 29, pleaded guilty to charges including wire fraud, securities fraud and commodity fraud.

“They are both cooperating with the Southern District of New York,” U.S. Attorney Damian Williams said Wednesday night in a video statement posted to social media.

Carolyn Ellison, former CEO of Alameda Research.

He added that anyone else found to have participated in the fraud should contact his office because “our patience is not forever” and it was possible that more criminal charges could be filed against others.

The surprise guilty pleas were announced as Bankman-Fried was being extradited from the Bahamas by US law enforcement to answer charges related to his role in the bankruptcy of FTX. He was expected to appear in federal court in New York City on Thursday.

Before Bankman-Fried went on the air, US prosecutors had not publicly disclosed that Ellison and Wang faced possible criminal charges or that they had committed to working with investigators.

It was unclear whether Bankman-Fried, who has apologized for FTX’s collapse but denied defrauding anyone, was also in the dark.

Ellison and Wang signed plea agreements on December part in exchange for a promise that prosecutors would recommend a reduction in their sentences if they fully cooperated in the investigation.

Gary Wang
Gary Wang, co-founder of FTX.

Without such an agreement, Ellison, who also faces a money laundering conspiracy charge, could face up to 110 years in prison. Wang could get up to 50 years.

Both were released on $250,000 bail after their secret court appearances with restricted travel to the continental United States.

Gary has accepted responsibility for his actions and he takes his obligations as a cooperating witness seriously,” said Wang’s lawyer, Ilan Graff.

An attorney for Ellison did not immediately return messages seeking comment.

In a parallel civil lawsuit filed Wednesday, the Securities and Exchange Commission said Wang and Ellison were “active participants” in what it said was Bankman-Fried’s scheme to defraud FTX investors and defraud their clients.

Wang created the software code that allowed Alameda to siphon funds from FTX clients. Ellison then used the embezzled funds for Alameda’s business, the SEC said.

Bahamian authorities arrested Bankman-Fried last week at the request of the US government. US prosecutors allege he played a central role in FTX’s rapid collapse and hid its problems from the public and investors.

The SEC and prosecutors said Bankman-Fried illegally siphoned client deposits on the FTX platform and used them to enable Alameda trading, buy real estate and make large campaign donations to US politicians.

Bahamian authorities arrested Bankman-Fried last week at the request of the US government.  (Royal Bahamas Police Force/Handout via REUTERS)
Bahamian authorities arrested Bankman-Fried last week at the request of the US government. (Royal Bahamas Police Force/Handout via REUTERS) (RBPF/)

The 30-year-old could spend the rest of his life in jail.

A Bahamian judge initially denied Bankman-Fried bail. The founder and former CEO of FTX, who once had a fortune in the tens of billions of dollars on paper, he was later committed to Fox Hill Prison in the Bahamaswhich has been cited by human rights activists as having unsanitary conditions and being infested with rats and insects.

On Wednesday, Bahamas Attorney General Ryan Pinder said Bankman-Fried had agreed to be transferred to the US.

Reporters saw Bankman-Fried leaving a Nassau magistrate court in a dark van early Wednesday after waiving her right to challenge extradition.

At his initial appearance in a US court, Bankman-Fried’s lawyer may request that he be released on bail.

Bankman-Fried was one of the richest people in the world on paper, with an estimated net worth of $32 billion. She was a prominent figure in Washington, donating millions of dollars to mostly left-leaning political causes and Democratic political campaigns. FTX grew to become the second largest cryptocurrency exchange in the world.

He has said he did not “knowingly” misuse customer funds, saying he believes his millions of angry customers will eventually recover.

At a congressional hearing last week, FTX’s new CEO John Ray III, who is tasked with leading the company through bankruptcy, bluntly disputed those claims: “We will never get all these assets back,” he said. Ray.

(With information from Europa Press and AP)

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