On Wednesday, federal prosecutors stated that two of FTX’s former associates had pled guilty to fraud charges and were collaborating with the government, prompting FTX founder Sam Bankman-Fried to leave the Bahamas for the United States.
Damian Williams announced via Twitter video that Gary Wang, co-founder of FTX, and Caroline Ellison, former CEO of Alameda Research, had pled guilty to misleading investors in the cryptocurrency trading platform.
The strain on Bankman-Fried increased dramatically after it became public that two of his closest former associates had opted to cooperate with the government.
Williams stated that Bankman-Fried is in the custody of the FBI. he is going to the United States, and he invited anyone else involved in the suspected fraud to come forward.
In a second statement released Wednesday night, the U.S. Securities and Exchange Commission (SEC) said it had charged Ellison and Wang for their roles in a multiyear plan to mislead FTX equity investors.
Additionally, the United States Commodity Futures Trading Commission announced that it has brought fraud charges against Ellison and Wang.
Ellison’s lawyer did not immediately reply to a request for comment.
Williams described the alleged theft by Bankman-Fried of billions of dollars in FTX client assets to cover losses at his hedge fund, Alameda Research, “one of the largest financial frauds in American history.” The theft was reported to federal authorities in Manhattan last week.
The 30-year-old crypto tycoon has admitted that there were problems with FTX’s risk management, but he still does not think he is criminally liable.
On Thursday, Bankman-Fried will most likely appear in a federal court in Manhattan, New York. In court, he will have an arraignment where he will be asked to enter a plea. The bail decision and any associated terms would be made by the American judge.