Carolyn Ellison, the former CEO of Alameda Research, and Gary Wang, co-founder of FTX, have both admitted to criminal fraud. Two of Fried’s Sam Bankman partners have reportedly pleaded guilty to criminal charges related to the demise of the FTX bitcoin exchange, according to a federal prosecutor.
“Related to their role in the fraud that contributed to the collapse of FTX,” American lawyer Damian Williams said Wednesday evening, citing Gary Wang’s IOUs, co-founder of FTX, and Carolyn Ellison, former CEO of Alameda Research, a trading company also founded by Bankman-Fried.
The SEC claims that Ellison, at the behest of Bankman, Fried’s between 2019 and 2022 inflated the price of FTT, a crypto security token issued by the FTX exchange, by purchasing significant amounts on the open market. The assets of FTX’s clients were used as collateral for loans to Alameda, a cryptocurrency hedge fund controlled by Wang and Bankman-Fried and managed by Ellison, with which FTX has not been candid about the relationship.
The lawsuit also says that Wang wrote the software code for FTX that enabled Alameda to reroute FTX client funds and that Ellison used hijacked FTX client funds for Alameda’s trading activities.
The guilty pleas were made at the same time that Bankman-Fried was being extradited from the Bahamas to the United States to face charges of his involvement in the downfall of FTX.
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Former Alameda Research CEO Carolyn Ellison and FTX co-founder Gary Wang have both committed criminal fraud. According to a federal prosecutor, two of Sam Bankman’s partners, Fried, pleaded guilty to criminal charges related to the collapse of the FTX bitcoin exchange.
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