Two associates of Sam Bankman-Fried plead guilty to fraud charges in FTX fall | FTX

A federal prosecutor says two associates of Sam Bankman-Fried have pleaded guilty to criminal charges related to the collapse of the cryptocurrency exchange FTX.

Carolyn Ellison, the former CEO of Alameda Research, a trading firm started by Bankman-Fried, and Gary Wang, who co-founded FTX along with Bankman-Fried, pleaded guilty to charges “related to their roles in the fraud that contributed to FTX’s collapse,” US attorney Damian Williams said Wednesday night.

According to the SEC’s complaint, between 2019 and 2022, Ellison, at the direction of Bankman-Fried, furthered the scheme by manipulating the price of FTT, an FTX-issued crypto security token exchange, by purchasing large quantities on the open market to prop up its price. FTT served as collateral for undisclosed loans by FTX of its customers’ assets to Alameda, a cryptocurrency hedge fund owned by Wang and Bankman-Fried and run by Ellison.

The complaint also alleges that Wang created FTX’s software code that allowed Alameda to divert FTX customer funds, and Ellison used misappropriated FTX customer funds for Alameda’s trading activity.

The guilty pleas were announced as Bankman-Fried was being flown to the US from the Bahamas by US law enforcement to answer to charges tied to his role in FTX’s failure.

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