FTX Co Founder and Alameda Ex CEO Join Forces Against SBF

FTX Co-Founder and Alameda Ex-CEO Join Forces Against SBF

The eyes of crypto enthusiasts are once again on the FTX crash, with former Alameda Research CEO Caroline Ellison and FTX co-founder Zixiao “Gary” Wang accepting charges related to the FTX crash.

Recall that the Department of Justice (DOJ) filed charges, specifically eight, against Bankman-Fried and accused him of orchestrating “one of the largest financial frauds in the history of the United States”, for which he was arrested in the Bahamas.

The charges include money laundering, wire fraud, securities fraud and campaign finance violations. These would carry a maximum penalty of 115 years in prison..

It also faces parallel civil cases from other regulatory bodies.

Ellison’s and Wang’s guilty pleas came as Bankman-Fried was extradited from the Bahamas to New York.

What happened

Damian Williams, the federal prosecutor for the Southern District of New York (SDNY), announced that two of the associates who belonged to the closest leadership of Sam Bankman-Fried, taking into account that Ellison is his ex-girlfriend, pleaded guilty to fraud.

Both agreed to cooperate with US authorities investigating the collapse of the bankrupt cryptocurrency exchange.

Ellison pleaded guilty to seven counts, including securities and wire fraud and conspiracy to commit money laundering, which carry a maximum sentence of 110 years in prison.

But with this agreement he would be getting rid of the harsh sentence.

For his part, Wang pleaded guilty to four counts of fraud, carrying a maximum sentence of 50 years.

Everything seems to indicate that they accepted a plea agreement to avoid even more prison time, and this would imply exposing the intentions and actions of the most prominent crypto criminal of 2022.

As long as Ellison cooperates with the SDNY investigation, as well as any other law enforcement agency designated by the office, you would be exonerated of any charges except criminal tax violations.

Additionally, she will not be allowed to leave the continental United States, and will be required to forfeit any proceeds derived from the commission of the crimes with which she has been charged.

Ellison will be allowed bail, provided he can provide a $250,000 personal acknowledgment bond. She will also need to hand over any travel documents she has.

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

The prosecutor handling the case once again made a call to the rest of the people involved:

“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,” he said.

Which brings everyone’s attention to the next actions of former Alameda CEO Sam Trabucco, who quietly rescued SBF, and who fled when all was about to be revealed.

It doesn’t end there

However, the settlement does not guarantee that other agencies will not take legal action at a later date.

At the same time, the Securities and Exchange Commission and the Commodity Futures Trading Commission (SEC) also filed civil lawsuits against Ellison, 28, and Wang, 29, accusing them of fraud.

“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 SEC said. .

In addition, its chairman, Chairman Gary Gensler drew attention to the fact that Ellison used the assets of FTX clients to pay off Alameda’s debts.

And, that it diverted billions of dollars of depositors’ money to the company to fill a void caused by the crypto market crash in May.

On the other hand, the United States Commodity Futures Trading Commission (CTFC) indicated that Wang participated in the creation of some of the algorithms that supported FTX.

Which allowed Alameda to “maintain an essentially unlimited line of credit” on the exchange, giving it an “unfair advantage” over regular depositors.

“These critical code features and structural exceptions allowed Alameda to secretly and recklessly divert FTX client assets from the FTX platform,” he noted.

What’s coming

SBF is scheduled to appear in court in Manhattan, where his request for bail will be considered, although after Ellison’s actions that is called into question.

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