Updated Dec 22, 2022 - Economy

Two major FTX figures plead guilty to federal charges

Illustration of a cracked coin with the FTX logo on it

Illustration: Sarah Grillo/Axios

Two major figures in the FTX scandal, company co-founder Gary Wang and former Alameda Research CEO Caroline Ellison, on Wednesday both pleaded guilty to several federal wire fraud and conspiracy charges. Each also was charged with fraud by the SEC and the CFTC.

Why it matters: The close confidants of disgraced crypto entrepreneur Sam Bankman-Fried are cooperating with federal prosecutors, according to U.S. Attorney Damian Williams.

  • Williams added that Bankman-Fried, charged last week with fraud, money laundering and campaign finance violations, was in FBI custody after waiving extradition from the Bahamas and due to arrive in New York Wednesday evening.

Details: Ellison pleaded guilty to seven counts total of wire fraud and conspiracy to commit wire fraud, commodities fraud, securities fraud, and money laundering, and faces up to 110 years in prison, according to her unsealed plea agreement.

  • Wang pleaded guilty to four counts total of wire fraud and conspiracy to commit wire fraud, commodities fraud, and securities fraud, and faces up to 50 years behind bars, per his unsealed plea agreement.
  • Both have been released on $250,000 bonds. They could still be prosecuted for tax violations and by other authorities, though the DOJ says it will recommend lighter sentences if they end up being significantly helpful in their cooperation.

Between the lines: Williams noted that Wednesday's announcement is not the last in the case, suggesting more individuals will be charged. Ellison and Wang are cooperating with federal prosecutors.

  • The SEC's complaint similarly noted that "Defendants, together with Samuel Bankman-Fried and others, engaged in a scheme to defraud equity investors." (Italics added by Axios for emphasis.)

Read the SEC complaint, via DocumentCloud:

Editor's notes: The story has been updated with additional about the charges and plea agreements.

Go deeper