Alameda CEO and FTX Exec Plead Guilty to Charges

U.S. Attorney Damian Williams announced on Wednesday night that former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang had pleaded guilty to charges related to FTX’s demise. 

Williams stated that the two are cooperating with investigators. 

The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) also charged the two, alleging that Ellison tricked the price of FTT, an exchange token produced by FTX, at the command of exchange founder Sam Bankman-Fried. 

The complaint reads: 

“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.”

FTX Founder Detained

The SEC and CFTC prosecuted FTX founder SBF this month after he was detained in the Bahamas. Money laundering, wire fraud, securities fraud, and campaign finance crimes are among the charges. He is currently being extradited to the United States. 

In his statement, Williams acknowledged that the FTX founder was in FBI custody and would appear in court “as soon as possible.”

Sanjay Wadhwa, SEC’s Deputy Enforcement Director, said that the three “were active participants in a scheme to conceal material information from FTX investors, including through the efforts of Mr. 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,” he added: 

“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.”

According to the SEC lawsuit, Ellison tweeted an offer to buy Binance’s entire investment in FTT for $22 at the instruction of Bankman-Fried following Binance announced his intention to liquidate his remaining shares in FTT token.