Holly MatkinNew York, NY – Two of FTX Founder Sam Bankman-Fried’s top executives – his ex-girlfriend and a company co-founder – secretly pleaded guilty to multiple counts for their roles in the rampant frauds that led to the collapse of the company and are cooperating with investigators, prosecutors revealed on Wednesday.
FTX Co-Founder Gary Wang, 29, and former CEO of hedge fund company Alameda Research, Caroline Ellison, 28, have both pleaded guilty to securities fraud, wire fraud, and commodities fraud, Manhattan U.S. Attorney Damian Williams announced on Dec. 21, according to the New York Post.
They entered their pleas on Dec. 19, Williams said in a press release.
Ellison pleaded guilty to seven counts of defrauding investors and customers of both Alameda and FTX, according to court documents.
She faces a maximum of 110 years in prison.
She was released on $250,000 bond as part of her plea agreement and will also need to pay an undetermined amount of restitution, the New York Post reported.
Wang pleaded guilty to conspiracy to commit commodities and securities fraud, conspiracy to commit wire fraud, and wire fraud, according to court documents.
He faces a maximum of 50 years in prison.
Wang and Ellison copped to the federal offenses prior to Bankman-Fried’s arrival in New York to answer to charges of his own.
The former crypto billionaire was extradited back to the U.S. from the Bahamas on Wednesday night, the New York Post reported.
He is facing eight federal counts, including money laundering and securities fraud, and could serve as many as 115 years in prison if he is convicted.
U.S. Attorney Nicolas Roos told the court that Bankman-Fried, 30, is at the center of “a fraud of epic proportions,” CNBC reported.
Prosecutors alleged he used investors’ funds to fund political donations, purchase properties, and backstop trades at Alameda Research, resulting in more than $8 billion in missing customer funds, according to the news outlet.
The company, which was once worth $32 billion, filed for bankruptcy in Delaware on Nov. 11, CBNC reported.
Bankman-Fried resigned his position as the company’s CEO the same day, according to the New York Post.
Williams described the company’s collapse as one of the “biggest financial frauds in American history.”
During a court appearance on Thursday, a New York Federal Judge Gabriel Gorenstein ruled Bankman-Fried will be released on a staggering $250 million personal recognizance bond while the case against him is pending, CNBC reported.
Prosecutors said it is the “largest-ever pretrial bond.”
The bond was secured by the signatures of Bankman-Fried’s parents, two other individuals who have “considerable” assets, and the equity in his family home, according to the news outlet.
Bankman-Fried will also be required to stay within the Northern District of California and must wear an electronic device and participate in mental health counseling, CNBC reported.
He was ordered to reside at his parents’ California residence.
According to court documents, another high-ranking FTX executive, Ryan Salame, flipped on Bankman-Fried on Nov. 9, telling Bahamian securities regulators that assets belonging to the company’s customers had been moved over to Alameda Research to make up for the hedge fund’s losses, according to the New York Post.
Williams said more arrests will be forthcoming.
“Last week, we announced charges against Samuel Bankman-Fried for 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 said in the press release on Thursday. “As I said last week, this investigation is very much ongoing, and it’s moving very quickly. I also said that last week’s announcement would not be our last, and let me be clear once again, neither is today’s.”
