Caroline Ellison, a former top executive at Alameda Research, and Gary Wang, the co-founder of FTX, have both accepted plea agreements with the Southern District of New York.
Sam Bankman-Fried, the former CEO of FTX, has been deported from the Bahamas and is currently in the custody of the FBI. He has not entered a plea of guilt. The maximum sentence for all three is 275 years.
Ellison acknowledged (1) seven criminal offenses in her unsealed plea bargain, including wire fraud against FTX clients and lenders of Alameda Research, commodities fraud, securities fraud, and money laundering. Her possible sentence is a total of 110 years in prison.
According to the terms of the agreement, Ellison's sentence will not necessarily be reduced because her pleads guilty. However, it is well known that people who comply quickly usually receive shorter prison terms than those who don't.
The former head of FTX's sibling firm must also return any ill-gotten gains she made due to her criminal behavior.
Ellison faces multiple charges, including perjury and obstruction of justice, concerning the alleged fraud against FTX clients and Alameda Research lenders. According to the document, she may also face criminal tax breach accusations.
Ellison was granted a bond for $250,000 and released. Her travel documents will be confiscated, and she will be prohibited from leaving the United States.
Additionally, FTX co-founder Wang was granted bail and released. However, he is still facing up to 50 years in prison on fewer counts of fraud.
Ellison & Wang have also been sued by the SEC and the CFTC. The two are helping investigators and do not dispute the allegations against them, which include attempting to artificially inflate the value of FTX's native token, FTT.
This is Bad News for SBF
The businessman with the curly hair probably should not have heard the news that his co-conspirators are now fully collaborating with authorities. It has been made very plain by US Attorney for the SDNY Damian Williams that those with knowledge of the scam would benefit from cooperating with authorities.
"I would like to repeat a call I made last week," Williams stated. "If you were involved in wrongdoing at FTX or Alameda, now is the opportunity to make amends. Our pace is rapid, and our tolerance is finite.
Whether or not Bankman-Fried intends to enter a guilty plea is unknown, but the longer he waits, the greater the likelihood he will receive a heavier sentence. The US Attorney additionally stated that the announcement of the plea deals with Ellison and Wang would not be the final statement made by his office.
"As I mentioned last week, this inquiry is still active. Last week, I promised that our statement wouldn't be our last. Again, let me be clear: "Today's is not like that," he emphasized.
Nishad Singh, a former FTX director of engineering, has not been charged with any crimes. Nor has Ryan Salame, the ex-CEO of FTX Digital Markets who, allegedly informed authorities about the scam two days before the crypto platform was shut down.