With ongoing investigations on the FTX collapse, the co-founder of the exchange, Gary Wang and ex-Alameda CEO, Caroline Ellison, have plead guilty to federal fraud charges. This could be a major problem for Sam Bankman Fried, who will soon appear in the US court. Both Gary and Caroline have been charged for their roles that led to the collapse of the 2nd largest crypto exchange, FTX.
FTX co-founder and ex-Alameda CEO might face prison
Gary Wang and Caroline Ellison will be sentenced to 10 years in prison if they are convicted of the charges against them. They are being held responsible for wire frauds, securities and commodities fraud. The US Attorney, Damian Williams, has reported that Gary and William will cooperate in the investigation against FTX and Sam Bankman Fried.
This means it will not be easy for SBF to deny allegations further and go around in circles in the investigation. He has already been moved back to the US and is now under the FBI’s custody. Sam already has 8 criminal charges against him, and there is a chance more charges will be pressed as investigations continue.
Damian Williams, the US Attorney in this case is quickly losing his patience now that the case has dragged on for so long. He said, “If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it.”
Caroline and Gary’s involvement in the FTX collapse
The ex-Alameda CEO, Caroline Ellison, was involved in manipulating the FTT token that FTX issued. The token was used to issue loans to 3rd parties. Gary Wang was also reportedly working with Caroline. He created a code that transferred FTX’s funds to Alameda and allowed Caroline to do margin trading with them.
Sam Bankman Fried was also charged with misleading investors by saying FTX is a safe trading platform with strong risk mitigation measures. The actions of Sam, Gary and Caroline resulted in huge losses that collapsed FTX. And they all ran away, leaving the platform users behind to take the losses.
What are your thoughts as FTX co-founder and ex-Alameda CEO plead guilty to multiple federal fraud charges? And do you think their cooperation in the case will result in SBF getting convicted? Let us know in the comments below. And, if you found our content informative, share it with your family and friends.