Two FTX executives plead guilty to federal charges and will likely become key witnesses against former FTX head Sam Bankman-Fried.
- FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison both pleaded guilty to many charges in the FTX scandal.
- The two have been released on bond, but authorities say they could still be prosecuted for other violations by other authorities.
- Wang and Ellison have turned on FTX’s CEO Sam Bankman-Fried and are working with federal authorities, and more individuals will be charged in the future.
Why it’s news
Executives close to FTX CEO Bankman-Fried have pleaded guilty and are working closely with the federal authorities.
FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison both pleaded guilty to federal wire fraud and conspiracy charges.
Ellison pleaded guilty to seven counts total of wire fraud and conspiracy to commit wire fraud, commodities fraud, securities fraud, and money laundering and faces up to 110 years in prison, according to her unsealed plea agreement.
Wang pleaded guilty to four counts total of wire fraud and conspiracy to commit wire fraud, commodities fraud, and securities fraud, and faces up to 50 years behind bars, per his unsealed plea agreement.
Both were released on a $250,000 bond, but authorities say they could be charged with other violations by other authorities. The two were told if they work closely with the federal authorities and help in the investigation, the DOJ will recommend lighter sentences.
Authorities say that the case is not over yet, as more individuals will be charged in the future.
Backing up a bit
Bankman-Fried was formally charged earlier in the month.
Despite his claims of hapless mismanagement, the SEC’s 28-page report directly asserts he knowingly engaged in fraud, hiding funds in hidden accounts and diverting user funds for personal investments and projects.He was arrested in the Bahamas following the month-long collapse of one of the largest cryptocurrency exchanges.