Associates of FTX founder plead guilty to criminal charges

Two associates of Sam Bankman-Fried have pleaded guilty to criminal charges related to the collapse of the cryptocurrency exchange FTX in cooperation deals, a federal prosecutor has announced as Bankman-Fried was on his way back to the United States from the Bahamas.

Carolyn Ellison, the former CEO of Alameda Research, a trading firm started by Bankman-Fried, and Gary Wang, who co-founded FTX along with Bankman-Fried, pleaded guilty to charges “related to their roles in the fraud that contributed to FTX’s collapse,” US Attorney Damian Williams said Wednesday night in a videotaped statement released on social media.

“They are both cooperating with the Southern District of New York,” Williams said, adding that anyone else who participated in the fraud should also reach out to his office because “our patience is not eternal.”

The guilty pleas were announced as Bankman-Fried was being flown to the US from the Bahamas by US law enforcement to answer to charges tied to his role in FTX’s failure. He was expected to appear in Manhattan federal court on Thursday.

In agreements signed with prosecutors on December 19, Ellison and Wang agreed to plead guilty to charges including wire fraud, securities fraud and commodities fraud in return for leniency at sentencing if they cooperate fully.

Williams said the guilty pleas and the transfer of Bankman-Fried to New York was in connection with a “sweeping fraud scheme that contributed to FTX’s collapse and for a campaign finance scheme that sought to influence public policy in Washington.”

Bankman-Fried was on his way to the United States after waiving his right to challenge the extradition.

Reporters on the scene witnessed Bankman-Fried leaving a Magistrate Court in Nassau in a dark SUV earlier Wednesday.