Caroline Ellison and Gary Wang pleaded guilty late Wednesday, December 21, according to the United States Attorney's Office for the Southern District of New York. Ellison was the former CEO of Alameda Research, and Wang was a founding member of the FTX exchange.
According to the New York Times, the pair has also agreed to cooperate in the case against crypto's public enemy number one, Sam Bankman-Fried.
SBF is now in the custody of the FBI after agreeing to be extradited from the Bahamas earlier this month. Attorneys said he would be brought before a judge as soon as possible, possibly on December 22.
According to US law, he must be presented to a court in Manhattan within two days of his arrival.
FTX Wreckage Investigation
According to the report, Gary Wang's lawyer stated, "Gary has accepted responsibility for his conduct and takes his obligations as a cooperating witness seriously." There was no comment from Ellison's lawyer.
Sam Bankman-Fried has been charged with defrauding customers, investors, and lenders, according to prosecutors. Furthermore, liquidators are searching through the FTX wreckage for up to $8 billion in missing funds.
Fraud and siphoning customer funds to buy real estate, lend out, make dubious investments through Alameda, and make political contributions are among the charges leveled against him.
"I do wish to waive my rights to formal extradition proceedings," Sam Bankman-Fried told judge Shaka Serville at a hearing on December 21.
Ellison and Wang, according to SEC Chair Gary Gensler, "played an active role in a scheme to misuse FTX customer assets to help support Alameda and to post collateral for margin trading."
According to Mary Cilia, FTX's new chief financial officer, the company has over $1 billion in assets. It has discovered approximately $720 million in cash assets in US financial institutions. The Department of Justice has authorized these to hold funds.
She also stated that approximately $130 million was held in Japan, with $6 million set aside for operational expenses such as payroll. She confirmed that the remaining $423 million in unapproved U.S. institutions is primarily with a single broker.
Can On-Chain Analysis Assist?
Blockchain.com CEO Peter Smith has been thinking about using on-chain analysis to track down the FTX funds.
Smith told Fox Business on December 20 that the banking system is the most difficult barrier to tracking money.
"The most difficult thing for firms working on this today is when money moves off the chain and into the banking system because they can't track it anymore."
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