On December 21, 2022, US Attorney Damian Williams announced that the Southern District of New York (SDNY) Department of Justice (DOJ) had filed charges against Alameda Research CEO Caroline Ellison and co-founder of FTX Gary Wang. Williams revealed that both parties had cooperated with law enforcement officers. The US Securities and Exchange Commission (SEC) also indicted Wang and Ellison the same day, and the Commodity Futures Trading Commission (CFTC) also filed charges. “Caroline Ellison and Gary Wang acknowledge their responsibility,” the CFTC stated in a statement Wednesday.
Executives cooperating with law enforcement
US Attorney Damian Williams of the SDNY Department of Justice announced that the government has filed fraud charges in relation to FTX cofounder Gary Wang and Alameda Research CEO Caroline Ellison.
“Both of them [Ellison and Wang] have pleaded guilty to [the] charges,” Williams reported. “And both sides are working together [SDNY]. Let me reiterate a call I made last Wednesday. If you have committed misconduct at FTX or Alameda, now is the time to come forward.”
Williams further added that “[law enforcement] is moving quickly and our patience is not eternal. Williams also told the press that FTX co-founder Sam Bankman-Fried (SBF) is now in US Federal Bureau of Investigation (FBI) custody. SBF is “on its way back to the United States.” Williams emphasized.
The Attorney noted that SBF would be taken to the SDNY District and will appear before a judge “as soon as possible.” “Many people in the Bahamas and the United States contributed to the speed of the defendant’s return,” Williams said. The US attorney thanked The Bahamas for their assistance in the investigation.
SEC and CFTC following SDNY’s lead
The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) also filed charges against Wang and Ellison on Wednesday.
“Ellison, under the direction of Bankman-Fried, furthered the scheme by manipulating the price of FTT, an exchange crypto security token issued by FTX, by purchasing large amounts on the open market to prop up its price,” the SEC press release revealed. “FTT served as collateral for FTX’s undisclosed loans of its client assets to Alameda, a crypto hedge fund owned by Wang and Bankman-Fried and managed by Ellison.” The SEC added.
Ellison and Wang are both cooperating with ongoing investigations by the SEC.
The CFTC charges show that Wang made changes to FTX’s code to bolster Alameda Research. “As alleged in the amended complaint