Executives involved in FTX scandal plead guilty to federal charges

 December 22, 2022

Two top executives involved in the FTX cryptocurrency platform scandal have pled guilty to federal charges related to their activities at FTX and Alameda Research, according to the prosecutor of the Southern District of New York.

Former CEO of Alameda Research Caroline Ellison and former chief technology officer and co-founder of FTX Zixiao "Gary" Wang both pleaded guilty to the charges, which were not made public. The Securities and Exchanges Commission also levied a civil complaint against the pair for alleged fraud.

"Both Miss Ellison and Mr. Huang have pled guilty to those charges, and they're both cooperating," U.S. Attorney Damian Williams said. "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."

Besides Ellison and Huang, FTX founder Sam Bankman-Fried is also facing charges, and has agreed to extradition from the Bahamas.

Bankman-Fried claims ignorance

Bankman-Fried continues to claim that he had no knowledge about the diversion of billions in customer funds to his trading firm, Alameda Research.

Both FTX and Alameda Research quickly went bankrupt when the problems and diversion came to light, and investors were defrauded of their money.

"I really deeply wish that I had taken like a lot more responsibility for understanding what the details were of what was going on there," Bankman-Fried told ABC News's George Stephanopoulos in a November interview.

"A lot of people got hurt, and that's on me," he said.

Serious charges

Some of what prosecutors want to find out is whether company records or accounts from Ellison and Wang can prove that Bankman-Fried did know about the diversion of funds or not.

Deputy director of the SEC’s Division of Enforcement Sanjay Wadhwa has already asserted that Bankman-Fried and Ellison tried to prop up the company's FTT price by giving nearly unlimited loans from FTX.

FTX was considered a shining light in a terrible cryptocurrency market earlier this year, but questions began to arise and intensify until serious financial problems came to light.

Turns out it was all too good to be true, and FTX was not the bright spot or panacea that those in the industry thought it was.

Political contributions

Before going bankrupt, Bankman-Fried was a major political donor to Democrats and some Republicans, to the tune of about $40 million.

Some politicians have now begun the process of donating the contributions from Bankman-Fried to their preferred charitable causes, according to the Washington Examiner.

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