The United States attorney for the Southern District of New York said on Wednesday night that two former executives of Sam Bankman-Fried's trading empire have pleaded guilty to federal criminal fraud charges.
The two are Gary Wang, a founder of the FTX coin exchange, and the chief executive of Alameda Research, who was also a founder. FTX and Alameda were the companies that Mr. Bankman- Fried founded and ran.
Ms. Ellison and Mr. Wang were charged with civil fraud by the SEC. According to the S.E.C., Ms. Ellison and Mr. Wang had created software that allowed for the diversion of money. Civil charges have been filed against Mr. Bankman- Fried.
The criminal fraud case against Mr. Bankman-Fried is moving in the right direction after he agreed to be extradited from the Bahamas.
The federal government has said that Mr. Bankman-Fried oversaw a fraud that turned him from one of the most powerful people in the industry into a criminal.
Federal prosecutors and regulators in the United States have accused Mr. Bankman-Fried of carrying out a fraud that diverted billions in customer money for other uses. He is accused of deceiving investors and customers before his firm collapsed.
The charges have come as a major blow to the industry, which has been reeling for the past year as prices of cryptocurrencies have plunged. Customers of other trading platforms were reassured that their money was safe when FTX collapsed.
FTX is a question. One of the world's largestcryptocurrencies exchanges is now bankrupt. It gave customers the ability to trade digital currency for other digital currency or traditional money. Risky trading options that are not legal in the U.S. were built into the company's business.
Sam Bankman- Fried is a person. He is the founder and former CEO of FTX. He was a major donor to the Democratic Party and was known for his commitment to giving away his wealth in efficient and logical ways.
FTX's troubles began. The chief executive of the world's largest exchange sold his stake in FTX to Mr. Bankman-Fried in exchange for a number of FTT token. Mr. Zhao said in November that he was going to sell the token. The move caused the price of FTT to fall.
FTX's collapse was caused by something. The price went down after Mr. Zhao announced. The company had an $8 billion shortfall due to traders withdrawing. FTX was forced to file for bankruptcy because of a loan offered by its main rival.
Mr. Bankman- Fried was arrested. The Justice Department and Securities and Exchange Commission are looking into whether FTX used customer funds to prop up Alameda Research, a platform that Mr. Bankman- Fried helped start. Mr. Bankman- Fried was arrested in the Bahamas for lying to investors. Civil fraud charges were filed by the S.E.C. the next day.
Ms. Ellison and Mr. Wang pleaded guilty to their roles in the case against Mr. Bankman- Fried.
Mr. Wang and Ms. Ellison were charged for their roles in the fraud that contributed to FTX's collapse.
The criminal charges against Mr. Bankman-Fried were announced last week. Mr. Williams said that if you were involved in wrongdoing at FTX or Alameda now is the time to act. Our patience is not eternal.
Mr. Bankman- Fried said he had done nothing wrong and had not intended to cheat anyone. He said he was unaware of what was happening at Alameda.
Mr. Williams said that Mr. Bankman-Fried was in F.B.I. custody and would be returned to the United States. He's going to be taken to Federal District Court in Manhattan.
Lawyers for Ms. Ellison didn't say anything. Gary takes seriously his obligations as a cooperating witness and has accepted responsibility for his actions.
A spokesman for Mr. Bankman- Fried wouldn't say anything.
The S.E.C. said that Ms. Ellison, under the direction of Mr. Bankman-Fried, had manipulated the price of a digital currency that FTX created.
Alameda was one of the major firms that was trading FTT and used the token as a way to raise funds from other firms.
Mr. Bankman-Fried, Ms. Ellison and Mr. Wang were involved in a scheme to hide information from FTX investors.
Ms. Ellison was an important part of Mr. Bankman- Fried's business empire. She and Mr. Bankman- Fried lived together in a five-bedroom penthouse in the Bahamas.
Ms. Ellison met Mr. Bankman- Fried while working at Jane Street. Effective Altruism is a community focused on using data to maximize the long-term impact of charity donations.
Mr. Bankman- Fried founded Alameda. Ms. Ellison became part of his inner circle after joining him. She became the chief executive of Alameda after Mr. Bankman- Fried founded FTX.
She was a powerful figure in the emergingcryptocurrencies. Ms. Ellison wasn't a big fan of technology. She said on FTX's official podcasts that she doesn't think a lot ofcryptocurrencies have real value. She explained on a previous episode that she got into it because she was going to give away a lot of money.
As FTX collapsed, Ms. Ellison gathered a group of Alameda staff members who were working from the company's office in Hong Kong, and confessed that the firm had used customers' deposits to fill a shortfall in its accounts.
One of Mr. Wang's close friends was Mr. Bankman- Fried. They lived in the same apartment complex.
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