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FTX Latest: Sam Bankman-Fried extradited to US and two top executives plead guilty to charges

origin 1FTX founder Sam Bankman-Fried is escorted from Magistrate Court in Nassau, Bahamas on Wednesday, December 21, 2022 ©Rebecca Blackwell/Copyright 2022 The AP.

The founder and former CEO of cryptocurrency exchange FTX, Sam Bankman-Fried, was extradited from the Bahamas by US law enforcement on Wednesday, to face charges related to his role in the bankruptcy of FTX. He is expected to appear in federal court on Thursday in New York City.

Meanwhile, two of Sam Bankman-Fried’s top associates have secretly pleaded guilty to criminal charges over the collapse of cryptocurrency exchange FTX and are cooperating with investigators, a federal prosecutor announced Wednesday as the digital currency entrepreneur was being flown into FBI custody to the United States from the Bahamas.

Carolyn Ellison, the 28-year-old former CEO of Alameda Research, a trading firm founded by Bankman-Fried, and Gary Wang, the 29-year-old who co-founded FTX, pleaded guilty to charges including wire fraud, securities fraud and goods.

“They are both cooperating with the Southern District of New York,” U.S. Attorney Damian Williams said in a video statement released on social media Wednesday night.

He added that anyone else involved in the fraud should contact his office because “our patience is not eternal” and further criminal charges against others were possible.

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The surprise guilty pleas were announced as Bankman-Fried was extradited from the Bahamas by US law enforcement to face charges related to his role in FTX’s bankruptcy. He was due to appear in federal court on Thursday in New York City.

Before Bankman-Fried was in the air, US prosecutors had not publicly disclosed that Ellison and Wang were facing potential criminal charges or that they had pledged to work with investigators.

It’s unclear whether Bankman-Fried, who has apologized for FTX’s collapse but denied defrauding anyone, was also in the dark.

Ellison and Wang signed plea deals on Dec. 19, in part in exchange for a promise that prosecutors would recommend a reduction in their sentences if they cooperate fully with the investigation.

Without such a deal, Ellison, who also faces a conspiracy charge for money laundering, could face up to 110 years in prison. Wang could be up to 50 years old.

Both were released on $250,000 (€235,000) bail following their secret court appearances with limited travel to the continental United States.

“Gary has accepted responsibility for his actions and takes his obligations as a cooperating witness seriously,” said Wang’s attorney, Ilan Graff.

An attorney for Ellison did not immediately return messages seeking comment.

In a parallel civil complaint filed Wednesday, the Securities and Exchange Commission said Wang and Ellison were “active participants” in what it called Bankman-Fried’s plan to defraud FTX investors and defraud its own clients.

Wang created the software code that allowed Alameda to divert FTX client funds. Ellison then used the embezzled funds for Alameda business, the SEC said.

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Authorities in the Bahamas arrested Bankman-Fried last week at the request of the US government. US prosecutors say she played a central role in FTX’s rapid collapse and hid its problems from the public and investors.

The SEC and prosecutors said Bankman-Fried illegally embezzled customer deposits on the FTX platform and used it to enable Alameda trading, buy real estate and make huge campaign donations to US politicians.

The 30-year-old could potentially spend the rest of his life in prison.

Bankman-Fried was initially denied bail by a Bahamian judge. The founder and former CEO of FTX, once worth tens of billions of dollars on paper, was then held in the Bahamas’ Fox Hill Jail, which has been cited by human rights activists as having poor sanitation and to be infested with mice and insects.

On Wednesday, Bahamian Attorney General Ryan Pinder said Bankman-Fried had agreed to be transferred to the United States.

Reporters watched as Bankman-Fried left a magistrate’s court in Nassau in a dark SUV on Wednesday after waiving his right to challenge extradition.

In his first appearance in a US courtroom, Bankman-Fried’s attorney will be able to request that he be released on bail.

Bankman-Fried was one of the richest people in the world on paper, with an estimated net worth of $32 billion. She was a prominent figure in Washington, donating millions of dollars to mostly leftist political causes and Democratic political campaigns. FTX has grown to become the second largest cryptocurrency exchange in the world.

He said he had not “knowingly” misused client funds and said he believes his millions of angry clients will eventually be healed.

In a congressional hearing last week, new FTX CEO John Ray III, who is tasked with putting the company out of business, bluntly disputed those claims: “We’re never going to get all of these assets back,” he said. Ray.