Former Alameda CEO, FTX Co-Founder Pleaded Guilty to Fraud Charges

Gary Wang, a co-founder of FTX, and Caroline Ellison, the former CEO of Alameda, both entered guilty pleas to multiple charges. They agreed to cooperate with ongoing investigations into “substantial” wrongdoing at FTX/Alameda in exchange for lighter sentences.

Agreed to Cooperation in Investigation

According to U.S. Attorney Damian Williams, Wang and Ellison have admitted guilt to charges relating to their roles in fraud that contributed to the demise of FTX. They also disclosed that they had both reached settlements with the SEC and were cooperating with the Justice Department’s investigation.

Ellison was charged with seven offenses; of those, she pleaded guilty to money laundering, conspiracy to commit commodities and securities fraud, and wire fraud and conspiracy to commit wire fraud against FTX customers and FTX’s sister hedge fund Alameda Research. The charges have potential penalties of up to 110 years in prison and millions of dollars, a source posted. 

Wang was charged with four counts of wire fraud, conspiracy to commit wire fraud, and a conspiracy to commit fraud in the commodities and securities markets. He also entered a guilty plea to these charges. The charges are punishable by up to 50 years in prison and fines.

FTX Fraud 

As he waits for his trial related to the failure of the FTX cryptocurrency exchange, Sam Bankman-Fried was granted release on a $250 million bond package on Thursday. Federal prosecutors accuse the founder of FTX in Manhattan of stealing billions of dollars in client funds to cover losses at his hedge fund.

On Thursday, Bankman-Fried was not required to enter a plea. Although he has previously admitted that FTX had poor risk management, he has maintained that he is not guilty of any crimes. Before the U.S., Magistrate Judge Gabriel Gorenstein scheduled Bankman-subsequent Fried’s hearing for January 3, 2023. Ronny Abrams, a district judge, will preside over the case.