FTX co-founder and former girlfriend of FTX CEO plead guilty to fraud

Caroline Ellison and Zixiao ‘Gary’ Wang have confessed to being involved in fraud at the crypto company FTX and contributing to the bankruptcy of the exchange. Ellison and Wang have both been released on bail.

The first suspect, Ellison, was CEO of FTX sister company Alameda Research and is accused of various types of fraud and money laundering. according to the US Department of Justice. For this, the former girlfriend of the already arrested FTX CEO Sam Bankman-Fried risks a prison sentence of up to 110 years. Alameda Research received more than ten billion dollars from crypto exchange FTX, consisting of investments from the latter’s customers. At least a billion dollars reportedly disappeared here.

Gary Wang is suspected of much of the same crimes; According to prosecutors, he also committed various types of fraud, but is not suspected of money laundering. He could receive a maximum prison sentence of 50 years. Wang was the founder of the cryptocurrency platform FTX alongside Bankman-Fried.

According to the DOJ, both suspects are cooperating with the investigation, which is why they are expected to receive a lower prison sentence than described above. Both are currently out on bail on a $250,000 bond per suspect.

FTX came into negative news at the beginning of November after the CEO of Binance decided to sell tokens linked to FTX. He did this in response to the suspicion that FTX was working with Alameda Research and that money was being indirectly channeled from the crypto exchange to that company, something that FTX claimed not to do. Subsequently, many customers tried to get their money back, exposing FTX’s lack of liquidity. The crypto platform collapsed and not much later it became clear that fraud may have been committed on a large scale.

Statement of US Attorney Damian Williams on US v. Samuel Bankman-Fried, Caroline Ellison, and Gary Wang pic.twitter.com/u1y4cs3Koz

—U.S. Attorney S.D.N.Y. (@SDNYnews) December 22, 2022