Associates of FTX Founder Plead Guilty to Fraud Charges

Two former top associates of FTX co-founder Sam Bankman-Fried have pleaded guilty to federal criminal fraud charges are cooperating with investigators, prosecutors said Wednesday, the same day the disgraced crypto market entrepreneur was extradited to the US to face criminal charges of his own .

Carolyn Ellison, the former CEO of Alameda Research, a trading firm started by Bankman-Fried, and FTC co-founder Gary Wang pleaded guilty to charges including wire fraud, securities fraud and commodities fraud.

“They are both cooperating with the Southern District of New York,” US Attorney Damian Williams said Wednesday night in a statement published on Twitter.

The pleas come as US authorities conduct investigations into the spectacular collapse of crypto exchange. The pleas are expected to increase the pressure on Bankman-Fried, who returned to the US from the Bahamas and is expected to appear in federal court in Manhattan on Thursday.

“If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” Williams said. “We are moving quickly and our patience is not eternal.”

Bankman-Fried was arrested in the Bahamas earlier this month on eight counts of conspiracy and criminal activity related to wire fraud, commodities fraud, securities fraud, money laundering and violation of campaign finance laws.

Separately, the US Securities and Exchange Commission has filed civil charges against Bankman-Fried for allegedly violating securities law and “orchestrating a scheme to defraud equity investors in FTX Trading Ltd.”

Bankman-Fried, also known as SBF, resigned as FTX’s CEO in November after the beleaguered cryptocurrency platform filed for Chapter 11 bankruptcy protection. The Bahamas-based exchange had been one of the biggest players in cryptocurrency, and Bankman-Fried was renowned for his lobbying of politicians on both sides of the aisle. But FTX’s meltdown has raised doubts about cryptocurrency and has left customers wondering if they’ll ever get their money back.

Revelations about the holdings and the close relationship between FTX and sister trading firm Alameda Research — over a third of the assets on Alameda’s balance sheet were FTT tokens issued by FTX — triggered a cascading series of events in November that led Alameda to cease operations and FTX to file for bankruptcy protection. Billions in investors’ funds seemingly vanished overnight.

“I was the CEO of FTX. That means I was responsible,” Bankman-Fried said during a live interview at The New York Times’ Dealbook Summit on Nov. 30. He has denied any criminal wrongdoing or intent.

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