Fall of FTX: The company comes out of silence and alerts other exchanges

The mysteries surrounding the collapse of FTX are starting to clear up little by little. New elements are added to the files of Sam Bankman-Fried. This time, it was two former colleagues of the ex-CEO of FTX who pleaded guilty to fraud before the federal judge in Manhattan. Far from being resolved, the FTX affair still raises many questions, particularly on corporate controls and regulations.

Ellison and Wang plead guilty to conspiracy and fraud

Caroline Ellison, former chief executive of Alameda Research, and Gary Wang, former chief technology officer of FTX, pleaded guilty in federal court in Manhattan on Monday. They admitted wrongdoing on all four counts of fraud and conspiracy. These former colleagues of Sam Bankman-Fried could face up to 50 years in prison.

Nevertheless, Wang’s attorney, Ilan Graff, said his client admits his guilt and takes its obligations as a cooperating witness seriously. They signed plea agreements. Their sentence should then be lighter if they respect these agreements. No sentence can be promised, but both Ellison and Wang were released on $250,000 bail.

Far from being resolved, the FTX affair still raises many questions
Far from being resolved, the FTX affair still raises many questions

They cooperate with the judge to move the case forward

The Securities and Exchange Commission (SEC) also found Ellison and Wang guilty of fraud. The US regulator alleges their contribution in diverting funds from FTX clients to the hedge fund, by misleading investors. The SEC also alleges price manipulation of FTT by Ellison, who was acting under the direction of Bankman-Fried. Managers then used the FTT to deceive investors about the health of their companies.

Sam Bankman-Fried was transferred to New York from the Bahamas this week. The guilty pleas of Ellison and Wang will allow to gather more elements on this historic case. Prosecutors are currently doing all they can to bolster the evidence against the ex-FTX CEO. Prosecutor Damian Williams confirms this by stating that they are working around the clock, and the case is far from over.

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