Former FTX, Alameda Research Executives Cooperating with the Authorities on Charges of Fraud

Both Wang and Ellison pleaded guilty to the federal charges against them.

Caroline Ellison behind a Gary Gensler pointing.
  • Both FTX co-founder and former Alameda Research co-CEO pleaded guilty to federal charges. 
  • Gary Wang pleaded guilty to conspiracy to commit securities, commodity, and wire fraud. 
  • Caroline Ellison pleaded guilty to wire fraud, conspiracy to commit money laundering, and conspiracy to commit securities fraud. 
  • Both executives are reported to be cooperating with officials.
  • Wang and Ellison face charges from the SEC and CFTC. 
  • Besides Wang and Ellison, SBF faces eight federal criminal charges.

According to reports, U.S. Attorney Damian Williams yesterday confirmed that FTX co-founder Gary Wang and former Alameda Research co-CEO Caroline Ellison both pleaded guilty to federal charges.

As revealed, Wang pleaded guilty to conspiracy to commit securities, commodities, and wire fraud. While Ellison pleaded to two counts of wire fraud, conspiracy to commit money laundering, and two counts of conspiracy to commit wire, commodities, and securities fraud. Both Ellison and Wang are said to be cooperating with the officials.

Illicit Activities of the Top Executives Connected to the FTX Collapse

Like SBF, both Wang and Ellison are facing charges from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). 

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According to the SEC, Wang and Ellison were involved in a multiyear project to dupe equity investors in FTX. As per a statement from the SEC, Ellison became the sole subject of the regulator’s complaint for facilitating in artificial manipulation of FTT. The SEC said Ellison carried out the manipulation to enhance Alameda Research’s collateral to take a loan. 

Alameda Research reportedly took various loans from prominent crypto firms like Voyager Digital and BlockFi Lending. The firms have gone bankrupt due to the collapse of FTX. 

The complaint by CFTC accused Ellison of “fraud and material misrepresentations in connection with the sale of digital asset commodities in interstate commerce.” In regards to Wang, he has been charged with  “fraud in connection with the sale of digital asset commodities in interstate commerce.” 

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SEC and CFTC accused Wang of creating software code to enable Alameda Research to use funds from FTX to finance its business practices. 

CFTC, in a separate statement, disclosed that Wang and Ellison admitted to being liable for the accusation before them. According to the SEC, they have been cooperating during the investigation.

The charges against Wang and Ellison surfaced the same day FBI agents were on their way to bring the former FTX boss to the U.S. Recall that SBF signed documents to aid his extradition to the U.S.

Alongside Wang and Ellison, SBF will face eight federal criminal charges.

On the Flipside

  • At the moment, only SBF, Wang, and Ellison are facing charges following the collapse of FTX. Sam Trabucco was at the helm of Alameda Research alongside Ellison till August 2022. As of press time, Trabucco is not facing any allegations despite joining around 2019 (until 2022), during which Williams alleged FTX and SBF had mismanaged users’ money.
  • Some claim Ellison cooperated with New York authorities before SBF’s arrest because she was spotted on Dec. 4 in a coffee shop near the New York Attorney’s office.

Why You Should Care

Authorities have been busy trying to bring those responsible for the FTX fiasco to justice. Additionally, in efforts to return SBF to the US, Attorney Damian Williams stated earlier in a press conference that they would pursue all those involved in the FTX mess. Recent developments show their unrelenting efforts. 

 

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Soumen Datta

Soumen has been a dedicated researcher and writer in the field of cryptocurrencies for the last few years. Even though Indian crypto regulations are still unclear, he believes that India will continue to innovate in the years to come. He loves to play his guitar and sing along in his spare time. He holds bags mostly in BTC, ETH, BNB, MATIC, ADA.