The CEO of sister company FTX pleads guilty to seven crimes | FTX

[ad_1]

Carolyn Ellison, the former CEO of FTX’s sister company Alameda Research, has agreed to plead guilty to seven counts including wire fraud, securities fraud and money laundering, according to a recently disclosed agreement with prosecutors.

The maximum total sentence for the crimes is 110 years, but Ellison’s cooperation with the investigation means she could potentially get a significantly reduced sentence.

Alongside the newly disclosed plea deal, the CFTC has filed an amended complaint detailing the case against Ellison and Alameda/FTX co-founder Gary Wang, including their conduct along with charges previously filed against Sam Bankman-Fried, co-founder. FTX Group Corporation.

The CFTC’s amended complaint charges Ellison with fraud and material misrepresentation in connection with the sale of digital asset goods in interstate commerce, and Wang with fraud in connection with the sale of digital asset goods in interstate commerce.

The commission alleges that Wang specifically wrote features into the core code of FTX, the cryptocurrency exchange, to allow Alameda to maintain a “essentially unlimited line of credit” on the platform. It also claims that Ellison directed Alameda to use “billions of dollars in FTX funds, including FTX client funds, to trade on other digital asset exchanges and fund a variety of high-risk digital asset industry investments.” Although she gambled Alameda’s clients’ money—obtained through the Unlimited Line of Credit and other loans between FTX and Alameda—she has publicly insisted that the two companies separate, for the complaint fee.

“With today’s fee, we continue to move aggressively to hold all individuals who commit fraud accountable and protect customers from additional damages and losses,” said Rustin Behnam, Chairman of the CFTC Board of Directors. “In the absence of a comprehensive regulatory framework for digital assets, the CFTC will use every Its current strength and authority to protect all market participants, while ensuring the safety of commodity markets.

Unlike Bankman-Fried, who was released on $250 million bail and ordered into custody at his parents’ Palo Alto home, Ellison’s bail was set at $250,000. She will not be allowed to leave the continental United States. The plea bargain protects her from further criminal charges, except for possible tax violations, but does not cover other potential civil prosecution from other agencies.

Subscribe to Business Today

Get ready for the work day – we’ll direct you to all the business news and analysis you need every morning

Privacy Notice: Newsletters may contain information about charities, online advertisements, and content funded by third parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.

The CFTC complaint describes the situation in Alameda after FTX announced plans to sell itself to rival Binance, a sale that failed and forced the exchange into bankruptcy. During a plenary meeting, the committee alleges, “Ellison acknowledged that earlier that year, it, Bankman-Fried, and other individuals had decided to use the assets of FTX clients to pay off Alameda’s debts, and that Wang and another FTX executive knew of this. … it clarified Also that Alameda can access user assets without requiring FTX approval because the “structure” allowed Alameda to become passive in coins.

[ad_2]