As former FTX’s CEO Sam Bankman-Fried is on his way to the U.S., his colleagues are cooperating with the investigation against them. Earlier today, U.S. Attorney Damian Williams announced that the FTX co-founder Gary Wang and the ex-CEO of Alameda Research, Caroline Ellison pleaded guilty in the Southern District of New York.
Elaborating on the latest development, Attorney Williams said,
“Let me reiterate a call that I made last week. 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.”
Ellison reportedly pleaded guilty to seven counts: conspiracy to commit wire fraud on customers of FTX, wire fraud on customers of FTX, conspiracy to commit wire fraud on lenders of Alameda Research as well as wire fraud on lenders of Alameda. Alongside, Ellison also pleaded guilty to conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering.
If found guilty Ellison would have to serve a maximum sentence of 110 years in prison.
The co-founder of FTX, Gary Wang, on the other hand, pleaded guilty to just four counts. This included conspiracy to commit wire fraud on customers of FTX, wire fraud on customers of FTX, conspiracy to commit commodities fraud, and conspiracy to commit securities fraud. Wang’s attorney commented about the same and stated,
“Gary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness.”
Additionally, Wang could face up to 50 years in prison. Furthermore, the Securities and Exchange Commission [SEC] and Commodities Futures Trading Commission [CFTC] separately charged the pair.
SEC labels FTX Token a security
In a complaint filed by the SEC late Wednesday, it labeled the exchange’s token FTT as a “security.” The SEC pointed out how the asset was sold as an investment contract. Further highlighting how the demand for the exchange and the token were interconnected, the SEC said,
“The large allocation of tokens to FTX incentivized the FTX management team to take steps to attract more users onto the trading platform and, therefore, increase demand for, and increase the trading price of, the FTT token.”
At press time, the FTX token was trading for $0.8733 with a 5.72 percent daily drop. This plummet comes right after SEC’s complaint was made public. Furthermore, FTT was inching closer to its all-time low of $0.8313.