In a video posted on Wednesday (21), U.S. Attorney Damian Williams announced that two executives from FTX and Alameda Research have pleaded guilty to fraud charges.
According to an SEC note, the allegations relate to manipulating the price of FTT, a token issued by the broker itself, and diverting assets from FTX clients to Alameda.
The text also quotes Sam Bankman-Fried and then accuses executives of raising billions of dollars from investors by promoting FTX as a safe trading platform, which was a false claim.
The guilty pleas take place as SBF is extradited to the US. Thus, this shows that the US authorities acted synchronously and only released such information after the founder had agreed to be extradited.
FTX executives plead guilty as SBF is extradited to US
The collapse of the FTX draws attention to its speed. After all, the rumors of his insolvency became fact in a matter of days, and US justice made arrests almost immediately as investors demanded answers.
This Wednesday, 21, prosecutor Damian Williams took to social media to update the world on the case.
“I want to do two advertisements. First, I am announcing that SDNY has filed charges against Caroline Ellison, former CEO of Alameda Research, and Gary Wang, co-founder of FTX, in connection with their role in the fraud that contributed to the collapse of FTX.”
“Both Elission and Wang have pleaded guilty to these charges and both are cooperating with the SDNY.”
Statement by U.S. Attorney Damian Williams on U.S. v. Samuel Bankman-Fried, Caroline Ellison, and Gary Wang pic.twitter.com/u1y4cs3Koz
—US Attorney SDNY (@SDNYnews) December 22, 2022
Following this, Williams asks others involved in FTX’s bankruptcy to speak out. Finally, he also notes that Sam Bankman-Fried is in FBI custody and is being transported to the US as soon as possible.
SEC publishes allegations of fraud against FTX and Alameda executives
Meanwhile, an SEC memo revealed more details about the allegations against Caroline Ellison, Gary Wang and Sam Bankman-Fried. These include FTT price manipulation and using customer FTX funds for other purposes.
“Ellison, led by Bankman-Fried, promoted the plan by manipulating the price of FTT […] buying large quantities on the open market to support the price.”points to the SEC, stating that such a token was used as collateral by Alameda to borrow from FTX.
“Bankman-Fried raised billions of dollars from investors by falsely touting FTX as a safe cryptocurrency trading platform.”
“The complaint alleges that Wang created FTX software code that enabled Alameda to embezzle funds from FTX clients, and that Ellison used funds embezzled from FTX clients for Alameda commercial activities.”
Finally, the SEC also points out that Bankman-Fried, with the knowledge of Ellison and Wang, moved hundreds more millions of dollars from FTX to Alameda after his brokerage firm was found to be insolvent.
So far, the market has not reacted to the events. Bitcoin is stuck at $16,800, without much change. The same goes for other cryptocurrencies, which are working steadily this Thursday.
Source: Live Coins
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
