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Home Opinions Crime FTX’s Sam Bankman-Fried Pleads Guilty to Fraud 
Crime - December 22, 2022

FTX’s Sam Bankman-Fried Pleads Guilty to Fraud 

According to U.S. Attorney Damian Williams, two of the former crypto tycoon Sam Bankman-Fried’s top aides have admitted to fraud, namely participating in a scheme to transfer and misappropriate FTX clients’ cash.

Federal officials are working with FTX co-founder Gary Wang and former trading company Alameda Research CEO Caroline Ellison as they look into Bankman-Fried and his dismantled enterprise.

In an email to Forbes, Wang’s lawyer Ilan Graff stated that, “Gary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness.”

In separate filings on Wednesday, the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) accused Ellison of “manipulating the price of FTT” (FTX’s cryptocurrency) at the direction of Bankman-Fried, revealing a “multiyear plan” to deceive equity investors. 

According to the SEC, inquiries into additional organisations that may have taken part in the misbehaviour are still underway.


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New court documents show

According to fresh court records in the SEC case, Wang, “created and participated in the creation of the software code that allowed Alameda to divert FTX customer funds.” Ellison, meanwhile, “used the misappropriated FTX customer funds for Alameda’s trading activity.”

Ellison and Bankman-Fried “schemed to manipulate the price of FTT,” according to SEC Chair Gary Gensler, in order to “prop up the value of their house of cards,” he said in a statement.

In addition to Ellison and Wang, Bankman-inner Fried’s circle also included former FTX Director of Engineering Nishad Singh, former co-CEO of FTX Digital Markets Ryan Salame, and former co-CEO of Alameda Research Sam Trabucco. 

The two new suspects’ guilty pleas shed some light on the mentality of this group. Salame alerted Bahamian regulators to FTX’s conduct, court documents recently showed.

Prior to being detained last week in the Bahamas, Bankman-Fried granted a number of interviews, during which the embattled CEO attempted to assign some of the responsibility to his former coworkers and friends.

Sam Bankman-Fried charged with eight criminal counts 

Bankman-Fried was indicted earlier this month on eight criminal offences, including wire fraud and money laundering, according to an unsealed indictment from the Southern District of New York’s US Attorney’s Office.

The founder of a cryptocurrency startup initially sought to resist extradition to the United States in Nassau, the capital of the Bahamas, where he has resided for almost two years. However, after spending several days in the island’s infamous Fox Hill prison, he decided to waive his right to a hearing.

In the Wednesday video announcement, Williams, the US Attorney for the Southern District of New York, also stated that Bankman-Fried was “currently in FBI custody.”

FTX indicated earlier this week that it would be attempting to recover donations that it and Bankman-Fried had given to charitable organisations, political campaigns, and other causes. Bankman-Fried is also accused of breaking the law on campaign funding by reportedly giving to politicians in other people’s names.

It was impossible to get in touch with Ellison and Wang’s attorneys right away for comment.


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