A Bear's Face on Mars Blake Lively's New Role Recognizing a Stroke Data Privacy Day Easy Chocolate Cake Recipe Peacock Discount Dead Space Remake Mental Health Exercises
Want CNET to notify you of price drops and the latest stories?
No, thank you

Associates of FTX Founder Plead Guilty to Fraud Charges

The pleas are announced as FTX co-founder Sam Bankman-Fried is extradited to the US.

Sam Bankman-Fried wearing a black T-shirt
Sam Bankman-Fried during a live interview on Nov. 30, 2022.
The New York Times/Screenshot by CNET

Two former top associates of FTX co-founder Sam Bankman-Fried have pleaded guilty to federal criminal fraud charges and are cooperating with investigators, prosecutors said Wednesday, the same day the disgraced crypto market entrepreneur was extradited to the US to face criminal charges of his own.

Carolyn Ellison, the former CEO of Alameda Research, a trading firm started by Bankman-Fried, and FTX co-founder Gary Wang pleaded guilty to charges including wire fraud, securities fraud and commodities fraud.

"They are both cooperating with the Southern District of New York," US Attorney Damian Williams said Wednesday night in a statement published on Twitter.

The pleas come as US authorities conduct investigations into the spectacular collapse of the crypto exchange. They are expected to increase the pressure on Bankman-Fried, who returned to the US from the Bahamas and is expected to appear in federal court in Manhattan on Thursday.

"If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it," Williams said. "We are moving quickly and our patience is not eternal."

Bankman-Fried was arrested in the Bahamas earlier this month on eight counts of conspiracy and criminal activity related to wire fraud, commodities fraud, securities fraud, money laundering and violation of campaign finance laws. 

Separately, the US Securities and Exchange Commission filed civil fraud charges Wednesday against Ellison and Wang, after filing civil charges against Bankman-Fried earlier this month for allegedly violating securities law and "orchestrating a scheme to defraud equity investors in FTX Trading Ltd."

"Ms. Ellison and Mr. Wang were active participants in the scheme to deceive FTX's investors and engaged in conduct that was critical to its success," the SEC said in a statement Wednesday.

Bankman-Fried, also known as SBF, resigned as FTX's CEO in November after the beleaguered cryptocurrency platform filed for Chapter 11 bankruptcy protection. The Bahamas-based exchange had been one of the biggest players in cryptocurrency, and Bankman-Fried was renowned for his lobbying of politicians on both sides of the aisle. But FTX's meltdown has raised doubts about cryptocurrency and has left customers wondering if they'll ever get their money back. 

Revelations about the holdings and the close relationship between FTX and sister trading firm Alameda Research -- over a third of the assets on Alameda's balance sheet were FTT tokens issued by FTX -- triggered a cascading series of events in November that led Alameda to cease operations and FTX to file for bankruptcy protection. Billions in investors' funds seemingly vanished overnight. 

"I was the CEO of FTX. That means I was responsible," Bankman-Fried said during a live interview at The New York Times' Dealbook Summit on Nov. 30. He has denied any criminal wrongdoing or intent.