Former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang pleaded guilty to charges tied to FTX’s collapse, U.S. Attorney Damian Williams announced Wednesday night.
The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) also announced charges against the two, saying Ellison manipulated the price of FTT, an exchange token issued by FTX, at exchange founder Sam Bankman-Fried’s direction.
The duo are cooperating with investigators, Williams announced. The U.S. Attorney for the Southern District of New York (SDNY) did not specify what they were being charged with. Court records were not immediately available.
FTX founder Sam Bankman-Fried was charged with eight crimes by the SDNY earlier this month after he was arrested in Nassau. The charges include money laundering, wire fraud, securities fraud, and campaign finance violations. He is being extradited to the U.S., Williams confirmed in his statement, saying that the FTX founder was in FBI custody and would appear in court “as soon as possible.”
Bankman-Fried and Ms. Ellison to artificially prop up the value of FTT, which served as collateral for undisclosed loans that Alameda took out from FTX pursuant to its undisclosed, and virtually unlimited, line of credit.”
Highlighted in the complaint are multiple times when Bankman-Fried made public statements, and provided investors with documentation via audited financial statements, that Alameda received no preferential treatment from FTX.
“Given their involvement in the fraudulent scheme outlined herein, Defendants knew or were reckless in not knowing that these statements to investors were false and misleading and that they were important to FTX’s investors,” the complaint reads.
“By surreptitiously siphoning FTX’s customer funds onto the books of Alameda, defendants hid the very real risks that FTX’s investors and customers faced,” added Wadha in a press release.
Ellison was a close confidant of Bankman-Fried’s, and has been targeted by prosecutors for her role in manipulating FTX’s exchange token FTT, which Alameda had used as collateral for investments. In early December Ellison, who is thought to reside in Hong Kong or Nassau, was spotted in Manhattan at a coffee shop leading many to suspect she was working with authorities.
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