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​Ex-girlfriend of crypto mogul pleads guilty ​

The ex-girlfriend of disgraced crypto mogul Sam Bankman-Fried and a co-founder of FTX have pleaded guilty to fraud charges and are co-operating with prosecutors.

The ex-girlfriend of disgraced crypto mogul Sam Bankman-Fried and a co-founder of FTX pleaded guilty to fraud charges in the collapse of the cryptocurrency exchange and are both co-operating with federal prosecutors.

Caroline Ellison, the former CEO of Mr Bankman-Fried’s crypto hedge fund company Alameda Research, and Gary Wang, a co-founder of FTX, pleaded guilty to the criminal offences before Mr Bankman-Fried landed in New York to face his own charges, Manhattan US Attorney Damian Williams said in a statement, the NY Post reports.

The charges filed against the pair were “in connection with their roles in the frauds that contributed to FTX’s collapse,” Mr Williams said.

“Both Ms Ellison and Mr Wang have plead guilty to those charges and they are both co-operating with the Southern District of New York.”

News of the charges came after Bahamian authorities handed Mr Bankman-Fried over to FBI custody.

He was flown back to New York on Wednesday night and will appear in front of a federal judge “as soon as possible”, the US attorney said.

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Caroline Ellison, former CEO of Alameda Research. Picture: @carolinecapital/Twitter
Caroline Ellison, former CEO of Alameda Research. Picture: @carolinecapital/Twitter
 
FTX co-founder Gary Wang. Picture: Crunchbase
FTX co-founder Gary Wang. Picture: Crunchbase


Prosecutors allege that Mr Bankman-Fried, the former CEO of FTX, hid the currency exchange’s financial problems from the public and defrauded investors out of more than $US1.8 billion ($2.6 billion).

The Securities and Exchange Commission accused Mr Bankman-Fried of illegally using investors’ money to fund Alameda and buy real estate on behalf of himself and his family.

He’s also charged with wire fraud, money laundering and campaign finance charges.

Mr Williams has described the FTX collapse as one of the “biggest financial frauds in American history”.

The company had an estimated worth at one point of $US32 billion ($47 billion)

He said his office’s investigation is ongoing but “moving quickly” and called on former employees of Mr Bankman-Fried’s crypto empire to come forward before federal authorities come for them.
 

Sam Bankman-Fried in the Bahamas on Wednesday. Picture: Joe Raedle/Getty Images
Sam Bankman-Fried in the Bahamas on Wednesday. Picture: Joe Raedle/Getty Images


“Let me reiterate a call I made last week — if you participated in misconduct at FTX or Alameda, now is the time to get ahead of it. We are moving quickly and our patience is not eternal,” Mr Williams said sternly.

Ms Ellison pleaded guilty to seven charges of defrauding customers and investors of both FTX and Alameda, according to the agreement.

The charges carry a maximum penalty of up to 110 years.

As part of the plea deal, she was released on a $US250,000 ($370,000) bond and is barred from leaving the US.

According to court documents, she is also to make restitution in an amount to be determined by the court.

Sam Bankman-Fried has been extradited to the United States. Picture: Joe Raedle/Getty Images
Sam Bankman-Fried has been extradited to the United States. Picture: Joe Raedle/Getty Images


Mr Wang, meanwhile, pleaded guilty to four charges including wire fraud, conspiracy to commit wire fraud and conspiracy to commit commodities and securities fraud.

The maximum sentence for the charges is 50 years in prison.

“We continue to work around the clock and we are far from done,” Mr Williams said about his office’s investigation.

Ms Ellison and Mr Wang are not the first FTX employees to flip on Mr Bankman-Fried.

Ryan Salame, a top FTX executive, told securities regulators in the Bahamas on November 9 that assets belonging FTX customers were transferred to Alameda to cover the hedge fund’s losses, according to a document released during FTX’s bankruptcy proceedings in Delaware.
 

FTX declared bankruptcy on November 11. Picture: Olivier Douliery/AFP
FTX declared bankruptcy on November 11. Picture: Olivier Douliery/AFP


Mr Bankman-Fried, Ms Ellison and Mr Wang were reportedly members of an FTX inner-circle group chat aptly called “Wire Fraud”.

In his final tweet before his arrest in the Bahamas, Mr Bankman-Fried admitted that he couldn’t rule out that such a group chat existed — just that he wasn’t involved.

Mr Bankman-Fried stepped down as CEO of FTX on November 11 — the day the company filed for bankruptcy.

Ms Ellison, 28, was believed by legal experts to be working with federal investigators to turn on her ex-boyfriend.

She was reportedly spotted in New York City last week.

This article originally appeared on NY Post and was reproduced with permission

Author: Editors Desk

Source: News Corp Australia Network:

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