U.S. Attorney Damian Williams revealed on Wednesday night that former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang had pled guilty to crimes related to the collapse of FTX.
The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission have both filed accusations against the two men, alleging that Ellison manipulated the price of FTT, an exchange token produced by FTX, at the instruction of FTX founder Sam Bankman-Fried.
Williams declared that the couple was helping authorities. The U.S. Attorney for the SDNY did not provide details about the nature of the charges against them. There was a delay in access to the court documents.
This month, FTX founder Sam Bankman-Fried was detained in Nassau and faced eight charges from the SDNY. Money laundering, wire fraud, securities fraud, and campaign finance crimes are all part of the indictment. The FTX founder was now in FBI custody and would appear in court when his extradition to the United States was finalized.
According to SEC Deputy Enforcement Director Sanjay Wadhwa, the three actively concealed material information from FTX investors, including through the efforts of Bankman-Fried and Ellison, to artificially prop up the value of FTT.
The case emphasizes the several occasions on which Bankman-Fried publicly stated and confirmed to investors via audited financial statements that Alameda had received no special treatment from FTX.
The defendants knew or were irresponsible in not knowing that these claims to investors were false and misleading and that they were crucial to FTX’s investors. The complaint referred to the defendant’s participation in the fraudulent scheme described in the lawsuit.
Further, the defendants concealed the genuine risks that FTX’s investors and consumers faced by secretly siphoning FTX’s client monies onto the books of Alameda.
Because she participated in manipulating the FTX exchange token FTT, which Alameda had used as collateral for investments, Ellison, a close confidante of Bankman-Fried, has become a target of prosecutors. Ellison.
Following this, Ellison hired WilmerHale as her legal representation. At WilmerHale, one of the leading lawyers is Stephanie Avakian, a former head of the SEC’s Division of Enforcement.
The FTX token was under pressure after Binance’s CEO said on November 6th that he would sell his remaining FTT token holdings.
According to the SEC lawsuit, Ellison tweeted an offer to purchase Binance’s entire holding of FTT for $22. According to the complaint, Bankman-Fried was also responsible for Ellison’s tweets questioning Alameda’s balance sheet integrity in response to a CoinDesk report.
According to the CFTC’s complaint, both Wang and Ellison enabled Alameda to retain a limitless line of credit on FTX. At the same time, Ellison committed fraud and made material misrepresentations in connection with the FTT transactions.