Two former associates of FTX founder Sam Bankman-Fried pleaded guilty to Securities and Exchange Commission (SEC) charges brought against them on Wednesday as part of a multi-year scheme to defraud investors.
Former Alameda Research CEO Caroline Ellison, 28, and former FTX Trading LTD chief technology officer Zixiao (Gary) Wang, 29, secretly pleaded guilty to charges including wire fraud, securities fraud and commodity fraud.
Wang also co-founded FTX with Bankman-Fried.
“They are both cooperating with the Southern District of New York,”[ads1]; U.S. Attorney Damian Williams said Wednesday night, referring to Ellison and Wang.
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Damian said additional criminal charges against others were possible.
The surprise guilty pleas came just hours after the charges were first announced, and around the same time Bankman-Fried landed in New York after being extradited from the Bahamas.
His extradition comes amid criminal charges US law enforcement brought against him related to his role in FTX’s failure. He was expected to appear in federal court in New York City on Thursday.
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Bankman-Fried faces multiple criminal charges from the Southern District of New York and the SEC, including conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to commit fraud. the Federal Election Commission and commit campaign finance violations.
His extradition to the United States was ordered by a Bahamas judge and was agreed to by the 30-year-old suspect as part of a “desire to make the relevant clients whole,” Reuters reported. He is expected to appear in federal court in New York City on Thursday.
The allegations against Ellison and Wang were not made public until after Bankman-Fried left the Bahamas.
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On December 19, Ellison and Wang signed plea agreements in exchange for a promise of a reduced sentence if they cooperated fully in the investigation.
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Without such an agreement in place, Ellison could face up to 110 years in prison. Wang can live up to 50 years.
FTX, once a premier cryptocurrency exchange, filed for Chapter 11 bankruptcy in November along with Alameda Research, West Real Series and 130 affiliates following FTX’s public collapse.
Prosecutors argue that Bankman-Fried illegally siphoned customer deposits from the FTX platform to bolster his personal fortune and to enable trading with Alameda, buying real estate and making huge campaign donations to US politicians.
The Associated Press contributed to this report.