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

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Gary Wang and Caroline Ellison have agreed to cooperate with the 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 United States authorities.

FTX co-founder Gary Wang, and the former chief executive of Alameda Research, Caroline Ellison, admitted to the charges and have agreed to cooperate with authorities in their ongoing investigations, the US attorney for New York’s Southern District, Damian Williams, said in a statement 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 in relation to its investigation into FTX.

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

“We continue to work around the clock and we are far from done,” Williams added.

In a separate announcement on Wednesday, the Securities and Exchange Commission and the Commodity Futures Trading Commission announced civil charges against Ellison and Wang.

“As part of their deception, we allege that Caroline Ellison and Sam Bankman-Fried schemed to manipulate the price of FTT, an exchange crypto security token that was integral to FTX, to prop up the value of their house of cards,” said SEC Chair Gary Gensler.

“We further allege that Ms. Ellison and Mr. Wang played an active role in a scheme to misuse FTX customer assets to prop up Alameda and to post collateral for margin trading. When FTT and the rest of the house of cards collapsed, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left investors holding the bag. Until crypto platforms comply with time-tested securities laws, risks to investors will persist. It remains a priority of the SEC to use all of our available tools to bring the industry into compliance.”

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

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