Two Bankman-Fried associates admit to to defrauding investors
\n NEW YORK
\nFTX founder Sam Bankman-Fried left the Bahamas on Wednesday on a U.S.-bound flight to face fraud charges as federal prosecutors announced that two of his former associates had pleaded guilty to similar charges and were now cooperating with the government.
\nManhattan U.S. Attorney Damian Williams said in a video posted on Twitter late Wednesday night that Caroline Ellison, former CEO of Alameda Research, and Gary Wang, co-founder of FTX, had pleaded guilty to defrauding investors in the crypto trading platform.
\nThe revelation that two of Bankman-Fried\u2019s closest former associates had decided to cooperate with the government significantly ramped up pressure on the former billionaire.
\nWilliams said that Bankman-Fried is now in FBI custody and on his way to the U.S and urged others involved in the alleged fraud to come forward.
\n\u201cIf you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,\u201d Williams said. \u201cWe are moving quickly and our patience is not eternal.\u201d
\n\u201cI also said that last week\u2019s announcement would not be our last, and let me be clear once again, neither is today\u2019s,\u201d he added.
\nThe U.S. Securities and Exchange Commission (SEC) in a separate statement on Wednesday evening said it had also charged Ellison and Wang for their roles in a multiyear scheme to defraud equity investors of FTX.
\nThe U.S. Commodity Futures Trading Commission also said it had filed fraud charges against Ellison and Wang.
\nAn attorney for Ellison did not respond immediately to request for comment.
\n\u201cGary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness,\u201d Ilan Graff, a lawyer for Wang, said in a statement.
\nFederal prosecutors in Manhattan last week charged Bankman-Fried with stealing billions of dollars in FTX customer assets to plug losses at his hedge fund, Alameda Research, in what Williams called \u201cone of the biggest financial frauds in American history.\u201d
\nThe 30-year-old cryptocurrency mogul has acknowledged risk-management failures at FTX, but has said he does not believe he has criminal liability.
\nA spokesman for Bankman-Fried\u2019s legal team declined to comment.
\n\u2018Make the relevant customers whole\u2019
\nBankman-Fried rode a crypto boom to become a billionaire several times over and an influential U.S. political donor, before FTX\u2019s crash wiped out his wealth and tarnished his reputation. The collapse was driven by a wave of customer withdrawals amid concerns over commingling of funds with Alameda.
\nThe announcements from Williams and regulators came just hours after Bankman-Fried took off from The Bahamas where he consented at a courthouse to be extradited to the United States.
\nEllison and Wang signed the plea deals on Monday, court records show, after Reuters and other outlets reported over the weekend that Bankman-Fried would waive his right to fight extradition.
\nThe agreements call for Ellison and Wang to each post a$250,000 release bond, and states that prosecutors may call for a judge to take their cooperation into account at sentencing if they \u201cprovided substantial assistance in an investigation or prosecution.\u201d
\nBankman-Fried is likely to appear before a U.S. federal court in Manhattan on Thursday. At his court appearance, known as an arraignment, he is expected to be asked to enter a plea. The U.S. judge would determine whether to grant him bail, and if so, on what conditions.
\nBankman-Fried was arrested on a U.S. extradition request last week in The Bahamas, where he lives and where FTX is based. He ultimately agreed to extradition in part out of a \u201cdesire to make the relevant customers whole,\u201d according to an affidavit read in court on Wednesday and dated Dec. 20.
\nDressed in a suit, Bankman-Fried stepped up to the witness box in court, where he spoke clearly and steadily as he was sworn in.
\n\u201cYes, I do wish to waive my right to such formal extradition proceedings,\u201d he told Judge Shaka Serville on Wednesday.
\nBankman-Fried\u2019s defense lawyer, Jerone Roberts, said his client was \u201canxious to leave.\u201d
\nThe judge said he was satisfied that Bankman-Fried had not been \u201cforced, coerced or threatened\u201d into making the extradition decision.
\nThe $32 billion exchange declared bankruptcy on Nov. 11, and Bankman-Fried stepped down as CEO the same day.<\/p>\n","protected":false},"excerpt":{"rendered":"
Two Bankman-Fried associates admit to to defrauding investors NEW YORK FTX founder Sam Bankman-Fried left the Bahamas on Wednesday on a U.S.-bound flight to face fraud charges as federal prosecutors announced that two of his former associates had pleaded guilty to similar charges and were now cooperating with the government. Manhattan U.S. Attorney Damian Williams […]<\/p>\n","protected":false},"author":2,"featured_media":302906,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-302870","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"yoast_head":"\n