Top FTX, Alameda execs plead guilty in connection to Bankman-Fried case

Former FTX and Alameda Research executives Caroline Ellison and Gary Wang have pleaded guilty to criminal charges in connection to a multibillion-dollar fraud allegedly orchestrated by Sam Bankman-Fried through his crypto exchange personal hedge fund, U.S. Attorney Damian Williams announced Wednesday.

Bankman-Fried, who agreed to be extradited from the Bahamas earlier Wednesday, is in FBI custody and is en route from the Bahamas to New York to face charges of wire fraud, money laundering and campaign finance violations, Williams said.

The 30-year-old former billionaire and political megadonor will appear in court before a judge “as soon as possible,” he said.

Ellison and Wang are cooperating with federal prosecutors and civil regulators in their investigations into FTX’s collapse, according to statements released by officials.

The charges against the two — along with the disclosure of their cooperation with federal prosecutors — mark the latest twist in Bankman-Fried’s sudden fall from grace. The MIT graduate was among the industry’s most respected executives and was a regular presence in Washington as lawmakers and market regulators weighed new rules for crypto over the last year.

He was also a prolific spender; having unloaded hundreds of millions of dollars over the last two years on advertising campaigns, philanthropic endeavors, political contributions and media partnerships in an effort to expand FTX’s trading platform to mainstream consumers.

The announcement by the U.S. Attorney coincided with the Securities and Exchange Commission filing civil fraud charges against Ellison, the former CEO of Bankman-Fried’s hedge fund Alameda Research, and Wang, who was FTX’s chief technology officer.

The Commodity Futures Trading Commission has also filed charges against the two, both of whom were considered key members of Bankman-Fried’s inner circle.

Ellison and Wang are accused of manipulating the price of FTT — an FTX-native token that was at the heart of the trading scandal that ultimately triggered the collapse of Bankman-Fried's investment empire. They’re also accused of misusing customer funds to backstop Alameda’s crypto trades and helping to mislead FTX investors.

“When FTT and the rest of the house of cards collapsed, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left investors holding the bag,” SEC Chair Gary Gensler said in a statement. “Until crypto platforms comply with time-tested securities laws, risks to investors will persist. It remains a priority of the SEC to use all of our available tools to bring the industry into compliance.”

Federal prosecutors and market regulators allege that Bankman-Fried’s fortune was largely stolen from customers and investors. FTX – which brought in restructuring expert John Ray III shortly before filing for bankruptcy last month – launched a process for the voluntary return of payments and political contributions made by Bankman-Fried and others earlier this 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,” Williams said.