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Alameda Executives Plead Guilty in Bankman-Fried case

Amid a multibillion-dollar fraud allegedly orchestrated by Sam Bankman-Fried through his crypto exchange personal hedge fund, former FTX and Alameda Research executives Caroline Ellison and Gary Wang have pleaded guilty to criminal charges, U.S. Attorney Damian Williams announced. Bankman-Fried agreed to be extradited from the Bahamas and is in FBI custody. He will face federal charges of wire fraud, money laundering, and campaign finance violations in New York City. Ellison and Wang are cooperating with federal prosecutors and civil regulators in their investigations into FTX’s collapse. Bankman-Fried, an MIT graduate, was among the industry’s most respected executives and was a regular presence in Washington as lawmakers and market regulators weighed new rules for crypto over the last year, reports Politico. He was also a prolific spender, spending hundreds of millions of dollars over two years on advertising campaigns, philanthropic endeavors, political contributions, and media partnerships in an effort to expand FTX’s trading platform to mainstream consumers.

The announcement by the U.S. Attorney coincided with the Securities and Exchange Commission's filing civil fraud charges against Ellison, the former CEO of Bankman-Fried’s hedge fund Alameda Research, and Wang, who was FTX’s chief technology officer. The Commodity Futures Trading Commission has also filed charges against the two, both of whom are accused of manipulating the price of FTT — an FTX-native token that was at the heart of the trading scandal that ultimately triggered the collapse of Bankman-Fried’s investment empire. They’re also accused of misusing customer funds to backstop Alameda’s crypto trades and helping to mislead FTX investors. “When FTT and the rest of the house of cards collapsed, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left investors holding the bag,” said SEC Chair Gary Gensler. “Until crypto platforms comply with time-tested securities laws, risks to investors will persist. It remains a priority of the SEC to use all of our available tools to bring the industry into compliance.” Federal prosecutors and market regulators allege that Bankman-Fried’s fortune was largely stolen from customers and investors. FTX, after filing for bankruptcy last month, launched a process for the voluntary return of payments and political contributions made by Bankman-Fried and others.


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