Sam Bankman-Fried‘s FTX co-founder, as well as his ex-girlfriend, have both pleaded guilty to federal fraud charges, entering the pleas in the Southern District of New York Court as part of deal for leniency when they are inevitably sentenced.
U.S. authorities announced the charges in a statement Wednesday, revealing the two top executives as FTX’s Gary Wang and former Alameda Research co-CEO Caroline Ellison, who once dated the embattled crypto crook.
Bankman-Fried, 30, faces eight charges which include allegedly conning investors out of $1.8billion by diverting cash to his private crypto hedge fund Alameda Research, run by his 28-year-old ex-girlfriend.
The pair have been charged ‘in connection with their roles and the frauds that contributed to FTX’s collapse,’ U.S. Attorney Damian Williams said in a video statement Wednesday, as Bankman-Fried was confirmed to be in FBI custody after being extradited from the Bahamas.
Williams added that after entering their pleas, both Wang and Ellison – two of the top executives at Bakman-Fried’s collapsed empire – are co-operating with New York officials in their case against the FTX founder. The official warned other FTX fraudsters to come forward, or face the full wrath of the federal government.
Sam Bankman-Fried’s FTX co-founder and his ex-girlfriend have both pleaded guilty to federal fraud charges in relation to the exchange’s collapse last month. Officials confirmed Bankman-Fried, 30, is now in FBI custody and is set to appear in New York court imminently
Caroline Ellison, the CEO of Alameda Research, is reportedly working with the federal government against her ex-boyfriend Sam Bankman-Fried
U.S. authorities announced the charges in a statement Wednesday, revealing one of the two top executives to be fellow FTX founder Gary Wang
Bankman-Fried, meanwhile, is set to be in SDNY court imminently, after being arrested by FBI officials while traveling from the Bahamas.
He has been charged with orchestrating a multiyear fraud that diverted billions in customer money for personal uses, including buying millions of dollars of real estate on the Caribbean islands.
Prosecutors contend he defrauded customers, investors and lenders involved with his now defunct crypto firm, which was once one of the biggest in the world before its sudden fall last month.
The U.S. Securities and Exchange Commission said in a separate statement said it has also charged Ellison and Wang for their roles in a multi-year scheme to defraud equity investors of FTX.
In agreements signed with prosecutors, Williams said, Ellison and Wang agreed to plead guilty to charges including wire fraud, securities fraud, and commodities fraud in return for leniency at sentencing if they cooperate fully.
U.S. Attorney Damian Williams said in a video statement Wednesday, he pair have been charged ‘in connection with their roles and the frauds that contributed to FTX’s collapse,’ and are cooperating with New York court officials for their burgeoning federal fraud case
Williams confirmed the pleas and the transfer of Bankman-Fried to New York was in connection with a ‘sweeping fraud scheme that contributed to FTX’s collapse and for a campaign finance scheme that sought to influence public policy in Washington.’
He went on to reiterate the federal court’s investigation into the alleged fraudulent activity carried out by brass at Bankman-Fried’s companies is still ongoing, saying specifically that today’s charges – announced in a pair of simultaneous SEC complaints against the two execs – are far from the last.
‘If you were participating in misconduct, now is the time to get ahead of it,’ Williams said, warning other prospective fraudsters to come forward or face more intense charges later.
‘We are moving quickly, and our patience is not eternal.’
Officials from Williams office added that Bankman-Fried – whose personal $16billion fortune vanished in the exchange’s $32billion implosion – could be arraigned before Judge Ronnie Abrams as early as tonight, time permitting.
Otherwise it is understood he will be held in overnight custody.
During his extradition Wednesday morning, Bankman-Fried was seen escorted by heavily armed guards at Odyssey executive jet facility next to Lynden Pindling International Airport in the Bahamas, ahead of his 6.25pm flight to the United States.
The alleged fraudster looked somewhat disheveled as he was pictured handcuffed exiting the nine-vehicle convoy, with several SWAT team SUVs present.
During his extradition Wednesday, Bankman-Fried was seen escorted by heavily armed guards at Odyssey executive jet facility next to Lynden Pindling International Airport in the Bahamas, ahead of his 6:25pom flight to the United States
The 30-year-old consented to extradition to the United States and isset to be tired in New York Southern District Court either tonight or tomorrow
Bankman-Fried initially said he would contest extradition, but it was later reported over the weekend that he would reverse that decision
Bankman-Fried had initially said he would contest extradition, but it was reported over the weekend that he has since reversed that stance after spending several days in the notorious His Majesty’s Prison Fox Hill – dubbed by locals as Fox Hell – where inmates in overcrowded cells defecate in buckets.
Bankman-Fried faces eight charges which include allegedly conning investors out of $1.8billion by diverting cash to his private crypto hedge fund Alameda Research, run by ex-girlfriend Ellison, 28.
They also include wire fraud, wire fraud conspiracy and conspiracy to commit money laundering. Each carries a maximum prison term of 20 years, according to the US Attorney’s Office for the Southern District of New York.
Bankman-Fried – one of the most powerful players in the crypto industry – was extradited after confusion Monday in a Bahamas court, where prosecutors, his local defense lawyer, and even the presiding magistrate seemed puzzled as to why the proceedings were being held.
The hearing was convened after reports surfaced that Bankman-Fried had a change-of-hear regarding his extradition. His attorney Jerone Roberts notably told the court: ‘I am not sure what Mr. Bankman-Fried is doing here this morning.’
The pressure of the case appeared to have taken a toll on the 30-year-old who wore a dark blue jacket and untucked shirt to the court hearing
Fox Hill prison where Bankman-Fried was detained. A prison official said the cells are ‘roughly 8ft by 10ft. Some have bathroom facilities, but many do not’
Prisoners dressed in rough-looking uniforms of wide blue and gray stripes, could be seen in various work parties in the low-security area beside the main entrance
A 2020 study by the Inter-American Development Bank found that 65 percent of inmates at Fox Hill said that drugs were easier to get inside the prison than outside