FTX co-founder Sam Bankman-Fried is escorted out of the Magistrate's Court on December 21, 2022 in Nassau, Bahamas.
Enlarge / FTX co-founder Sam Bankman-Fried is escorted out of the Magistrate's Court on December 21, 2022 in Nassau, Bahamas.

A federal prosecutor in Manhattan said on Wednesday that two of Sam Bankman-Fried's closest associates have pleaded guilty to fraud.

The guilty pleas and criminal charges were announced by the US attorney for the Southern District of New York. The charges were brought against Bankman- Fried last week.

The announcement from Williams came just after a plane carrying Bankman-Fried took off from the Bahamas, where he waived his right to challenge extradition to the US. He landed in New York late on Wednesday, local media reported, and is due to appear in a Manhattan court as soon as Thursday, where his bail request will be considered.

Among the key members of a tight circle of associates who ran Bankman-Fried's crypto empire were the trio of longstanding friends. The executives lived together in a luxury apartment.

According to signed agreements, Ellison pleaded guilty to seven counts, including wire fraud and conspiracy to commit securities fraud, which carries a maximum sentence of over 100 years in prison, while Wang pleaded guilty to four counts of fraud and conspiracy to commit fraud, with a maximum 50 year sentence.

As they await formal sentencing, prosecutors will not oppose bail requests from both defendants under certain conditions, including posting a bond.

Ellison and Wang were accused of fraud by the Securities and Exchange Commission and Commodity Futures Trading Commission.

The SEC alleges that Ellison diverted billions of dollars of depositors' money to the company to fill a hole caused by the crash of thecryptocurrencies.

The CFTC said Wang had a hand in creating some of the software that underpinned FTX, which allowed Alameda to maintain an unlimited line of credit on the exchange.

The critical code features and structural exceptions allowed Alameda to steal from the FTX platform.

The defendants were cooperating with the SEC. They didn't contest their liability.

Gary has accepted responsibility for his actions and is a co-operating witness. Lawyers for Ellison didn't reply to questions.

The events leading to FTX's collapse and the allegations against its senior executives were played out by Alameda.

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The earliest employees were Bankman- Fried, Wang and Ellison. The firm shifted from safe arbitrage strategies to riskier ones due to borrowed money.

Bankman-Fried and Wang gave up their roles at Alameda to avoid the appearance of conflict of interest between the firms. US authorities claim they were still involved with Alameda.

Ellison and Bankman-Fried are accused of manipulating the price of the FTX token. The collapse of the price of the token was threatening to wipe out the trading firm.

The value of their house of cards was propped up by artificially supporting the price.

Bankman-Fried was accused by the US Department of Justice of orchestrating one of the biggest financial frauds in American history by misappropriating customer assets. The man is in the Bahamas. The SEC and CFTC have civil cases against him.

Bankman-Fried stepped down from his position as FTX's chief executive. A representative for Bankman-Fried wouldn't say anything.

Williams wants others who worked with Bankman- Fried to come forward. He said that if you were involved in the conduct at FTX or Alameda, now is the time to act. Our patience is not eternal.

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