Sam Bankman-fried agreed to extradition to US while Gary Wang & Caroline Ellison pleads guilty.
Days after SBF arrest, the former executives and co-workers of Sam Bankman-Fried pleads guilty to federal fraud charges. Gary Wang was the co-founder of now bankrupt FTX exchange and Caroline Ellison was the CEO of Alameda Research.
Alameda Research is a hedge fund owned by FTX exchange. SBF took user funds deposited on the exchange and transferred them to Alameda to invest in assets without notifying its customers.
SBF and former chief engineer Nishad Singh collaborated and made a secret change in the exchange software. They tweaked the code that will auto-liquidate Alameda assets if it was losing too much-borrowed money from FTX.
As a result, Alameda Research kept on losing billions of dollars while utilizing the funds of FTX users. The executives were aware of the matter & were equally involved in the fraud. Both Gary Wang & Caroline Ellision facilitated the process with complete awareness.
According to SEC, Caroline was involved in price manipulation of FTX native token FTT. The token was issued as collateral for undisclosed loans from FTX customers. On the other hand, Gary Wang developed the software code that allowed Alameda to divert FTX customers’ funds.
If convicted, both the executives will face a jail term of 10 years under the charges including wire fraud, commodities fraud, and securities fraud.
Meanwhile, Sam Bankman-Fried has signed the extradition papers. He is in the process of extradition to the US, the local authorities are completing the legal formalities involved in the matter.
SBF has been charged with misleading customers and financial misconduct. He reportedly misused $10 billion worth of user funds to fund his expenses, purchase expensive properties in the Bahamas and fund Alameda Research.
If proven guilty, SBF will face 115 years in prison.
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Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.