Zixiao (Gary) Wang, a co-founder of FTX, and Caroline Ellison, the CEO of Alameda Research, have been charged by the government with fraud, according to U.S. attorney Damian Williams and the SDNY Department of Justice (DOJ).
“Both (Gary Wang and Caroline Ellison) have pleaded guilty to the charges. And they are both cooperating with the [SDNY]. Let me reiterate a call that I made last week. If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” said Williams.
According to the SEC press release, FTX co-founder Sam Bankman-Fried (SBF) directed Ellison to manipulate the price of FTT, an exchange crypto security token produced by FTX, by buying significant quantities on the open market to boost its price. FTT was used as security for undisclosed loans made by FTX to Alameda, a cryptocurrency hedge fund controlled by Ellison and owned by Wang and Bankman-Fried. The SEC added that both Wang and Ellison are cooperating with the ongoing investigation.
According to the amended complaint, Wang allegedly incorporated special features into the FTX trading platform’s programming that let Alameda to keep a virtually limitless line of credit on FTX — said the CFTC.
Williams also noted how rapidly law enforcement is working. He further disclosed to the media that Bankman-Fried is currently being held by the American Federal Bureau of Investigation (FBI). Williams emphasised that SBF is “on his way back to the United States.”
SBF will be brought to the SDNY district and brought before a judge as soon as possible, the attorney noted. Williams stated that “many individuals in The Bahamas and the United States contributed to the swiftness of the defendant’s return.” The Bahamas were acknowledged by the US attorney for helping with the investigation.
