Sam Bankman-Fried's Crypto Execs Admit Fraud
Two top officials of Sam Bankman-Fried's cryptocurrency empire have admitted to committing fraud. The Southern District of New York US Attorney announced on Wednesday night that two former employees of Sam Bankman-Fried crypto businesses had pled guilty to federal criminal fraud charges and are collaborating in prosecuting the disgraced crypto entrepreneur.
Gary Wang, 29, founded the exchange FTX, and Caroline Ellison, 28, ran the cryptocurrency hedge fund Alameda Research. They played pivotal roles in the development of the global Sam Bankman-Fried crypto empire, which he launched with the creation of Alameda and FTX.
Following last week's fraud complaints against Mr. Bankman-Fried, two federal regulatory agencies, the Commodity Futures Trading Commission and the SEC (Securities and Exchange Commission), filed civil fraud charges against Mr. Wang and Ms. Ellison and Mr. Wang on Wednesday.
Facing further legal trouble as former employees plead guilty to fraud
Mr. Bankman-Fried is in detention in the Bahamas after agreeing to be extradited to face trial in the US. The 30-year-old is in an especially precarious legal position due to the criminal and civil allegations leveled against the former top executives.
The US Government has accused him of perpetrating a massive fraud lasting for years that led to FTX filing for bankruptcy last month.
Two of his closest advisors are now helping federal prosecutors with their investigation. The friendship between Mr. Bankman-Fried and Mr. Wang and Ms. Ellison extended beyond that of close colleagues. He lived with them in a lavish condominium on Paradise Island, the Bahamas, where FTX was headquartered.
Prosecutors and regulators have filed charges against Mr. Bankman-Fried, alleging that he misappropriated billions of dollars from his customers to fund his activities. These include purchasing real estate in the Bahamas, trading cryptocurrencies at Alameda, funding political campaigns, and investing in other cryptocurrency companies. They say he bilked crypto trading company clients, financiers, and lenders.
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