Crypto Analyzer

Gary Wang and Caroline Ellison Plead Guilty to Federal Fraud Charges and Agree to Settlements with CFTC and SEC

Gary Wang, cofounder of crypto trading platform FTX and Caroline Ellison (ex-CEO of Alameda Research), have pleaded guilty federal fraud charges brought by the Department of Justice. Wang and Ellison agreed to settle separate fraud allegations with the Commodity Futures Trading Commission CFTC and the Securities and Exchange Commission SEC.

Wang pleaded guilty for conspiracy to do wire fraud, wirefrau, conspiracy to commit commodities and securities fraud. Ellison pleaded guilty two counts each of wire fraud, conspiracy, wire fraud and conspiracy to defraud, conspiracy to do commodities fraud, conspiracy in securities fraud, money laundering, and two counts of conspiracy.

SEC and the CFTC filed complaints against Ellison and Wang alleging they were involved in a scheme to defraud equity shareholders in FTX over a number of years and artificially manipulating FTT, FTX’s self-issued token. The SEC also alleges that Wang created a backdoor in FTX’s software platform that allowed Alameda funds to be diverted for its own trades.

Both Ellison and Wang have both accepted the allegations against them and agreed to cooperate authorities. Wang and Ellison agreed to bifurcated settlements in settlements with the CFTC/SEC. These settlements allow them both to resolve the charges and not admit or deny the allegations.

As a result, Sam Bankman Fried, the former CEO of FTX faces eight federal criminal charges by the same prosecutors from the Southern District in New York. Bankman-Fried, who was taken into custody in the Bahamas last Wednesday, is currently under extradition proceedings to the United States.