Bad news for Bankman-Fried as Ellison and Wang plead guilty

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Former chief exec of Alameda Research, Caroline Ellison, has entered a plea deal with the Southern District of New York, along with FTX’s co-founder Gary Wang.

Former FTX chief Sam Bankman-Fried has not pleaded guilty, but has landed on US soil after agreeing to extradition from the Bahamas, and is now in the custody of the FBI. Combined, the three face up to 275 years in prison.

Ellison’s unsealed plea agreement shows that she admitted to seven counts of criminal charges, including committing wire fraud on FTX customers and lenders of Alameda Research, conspiracy to commit commodities fraud and securities fraud, as well as conspiracy to commit money laundering. All in all, she faces 110 years behind bars.

The agreement states that by pleading guilty, Ellison doesn’t necessarily get a lighter sentence. That said, it’s common knowledge that those who cooperate early tend to get fewer years in prison than those who don’t. The former chief exec of FTX’s sister company must further pay back anything she earned from committing these crimes.

If she chooses not to cooperate fully with authorities, Ellison may also be charged with a host of other crimes relating to fraud on FTX customers and Alameda Research lenders, as well as perjury and obstruction of justice. The document states that criminal tax violations charges may soon be coming her way, too.

Read more: New FTX chief describes the firm’s collapse in bankruptcy testimony

Ellison has been released on bail for $250,000. Her passport and other travel documents will be seized, and she won’t be allowed to travel outside the continental US.

Wang, the co-founder of FTX, has also been released on bail. He faces fewer counts of fraud and up to 50 years in prison. The criminal charges he admitted to include wire fraud and conspiracy to commit commodities fraud and securities fraud.

Further, both Ellison and Wang have been sued by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Both are cooperating and don’t deny the charges against them, which include manipulating the price of FTX’s native token, FTT.

Bad news for Bankman-Fried as cabal pleads guilty

News that his co-conspirators are fully cooperating with authorities doesn’t bode well for the curly-haired entrepreneur. The US attorney for the SDNY, Damian Williams, made clear that anyone involved with the scandal would do well to cooperate.

“Let me reiterate a call I made last week,” Williams said in a statement. “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.”

It’s unclear if Bankman-Fried plans to plea guilty, but what is clear is that the longer he waits, the more likely it is he’ll receive harsher sentencing. The US Attorney further warned that news of Ellison and Wang’s plea agreements would not be the last announcement his office makes regarding the case.

“As I said last week, this investigation is very much ongoing. I also said that last’s week announcement would not be our last. And let me be clear, once again, neither is today’s,” he said.

Former FTX director of engineering Nishad Singh has not been accused of any wrongdoing by authorities so far. Neither has Ryan Salame, former co-CEO of FTX Digital Markets, who reportedly blew the whistle on the fraudulent operation to authorities, just two days before the crypto exchange was forced to close.

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