On December 21, 2022, US Attorney Damian Williams announced that the Southern District of New York (SDNY) Department of Justice (DOJ) has filed charges against Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang. Williams said both Ellison and Wang are cooperating with law enforcement. The US Securities and Exchange Commission (SEC) also charged Wang and Ellison the same day, and the Commodity Futures Trading Commission (CFTC) followed suit with charges. “Carolin Ellison and Gary Wang admit liability,” the CFTC said in a statement Wednesday.
Wang and Ellison are cooperating with law enforcement
US Attorney Damian Williams and SDNY Department of Justice (DOJ) announced the government filed fraud charges against FTX co-founder Zixiao (Gary) Wang and Alameda Research CEO Caroline Ellison.
“Both of [Ellison and Wang] found themselves guilty [the] charges are filed,” Williams told the press. “And they cooperate with both [SDNY]. Let me repeat a call I made last week. If you have been involved in wrongdoing at FTX or Alameda, now is the time to stop it.”
Williams then added that “[law enforcement] it’s moving fast and our patience doesn’t last forever.” Williams also told the press that FTX co-founder Sam Bankman-Fried (SBF) is currently in custody at the US Federal Bureau of Investigation (FBI). SBF “is coming back to the United States,” Williams said.
SBF will be transported to the SDNY District Court and appear before a judge “as soon as possible,” the attorney said. “Many individuals in the Bahamas and the United States contributed to the speedy return of the defendant,” Williams said. The American lawyer thanked the Bahamas for helping the investigation.
Follow the Guidance of SEC and CFTC SDNY
The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) also filed charges against Wang and Ellison on Wednesday.
“Ellison, at the direction of Bankman-Fried, developed the scheme by manipulating the price of FTT, an exchange-traded crypto security token issued by FTX, by purchasing large quantities in the open market to inflate its price,” the SEC’s press statement said. . “FTT pledged assets of its clients for an Alameda crypto hedge fund owned by Wang and Bankman-Fried and managed by Ellison for undisclosed loans by FTX.” The SEC added:
Ellison and Wang are cooperating with the SEC’s ongoing investigation.
The CFTC’s charges allege that Wang added special features to the FTX code to bolster the Alameda Investigations. “As alleged in the amended complaint, Wang created features in the code underlying the FTX trading platform that allowed Alameda to maintain an essentially unlimited line of credit on FTX,” the CFTC said Wednesday.
“Ellison and Wang do not contest the CFTC’s commitment to their claims,” the CFTC said. “Both have agreed to enter into consent decrees regarding their liability for engaging in fraud in violation of Section 6(c)(1) of the Commodity Exchange Act and CFTC Rule 180.1.”
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