Bankman-Fried execs likely to be freed on bail after FTX fraud pleas

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U.S. Attorney for the Southern District of New York, Damian Williams, speaks at a new conference held at the US Attorney’s Office for the Southern District of New York (SDNY) on Tuesday, December 13, 2022.

Gina Moon | Bloomberg | Bloomberg | Getty Images

Federal Prosecutors Say Two Former Lt. Sam Bankman-Freed, Gary Wang and Caroline Ellison, Assisted in Billion-Dollar Scam Allegedly Conducted by Former FTX CEO Bankman-Freed After pleading guilty, he backed plans to grant bail, court documents show.

Gary Wang was FTX’s Chief Technology Officer. Caroline Ellison was co-CEO of Alameda Research, a Bankman-Fried cryptocurrency trading firm.

Wang and Ellison must each post $250,000 bail, surrender their passports, and be restricted from traveling to the mainland United States.

In return, the pair acknowledged its role in aiding an $8 billion scam that has turned millions of customers away from investing and destabilized the cryptocurrency industry.

Prosecutors have not challenged the bail conditions, but it is unclear whether a judge will approve them.

Lawyers for Ellison and Wang did not immediately respond to requests for comment.

King’s attorney Ilan Graff, a partner at Fried Frank Harris Schreiber & Jacobson, said in an earlier statement, “Gary accepts responsibility for his actions and takes seriously his duties as a co-witness. There are,’ he said.

Wang and Ellison not only admitted complicity in the FTX bankruptcy, but also signed a consent order with the Commodity Futures Trading Commission. Wang and Ellison also settled separately with the Securities and Exchange Commission.

Wang, 29, and Ellison, 28, pleaded guilty to fraud charges stemming from their leadership positions at FTX and Alameda, respectively. They signed the deal on Monday at the United States Attorney’s Office in Manhattan.

It is not yet known if Bankman-Fried, 30, has taken a plea bargain. In a prerecorded statement Wednesday night, U.S. Attorney Damian Williams said the indicted former FTX CEO was taken into FBI custody following a chaotic extradition process in the Bahamas.

Bankman-Fried will appear before a judge on Thursday.

On December 22, 2022, FTX founder Sam Bankman-Fried’s mother, Barbara Fried, arrives at Manhattan Federal Court in New York City for his arraignment and bail hearings.

Michael M. Santiago | Getty Images

FTX’s bankruptcy was sparked when a CoinDesk report revealed a heavy concentration on self-issued FTT coins. It was used by Bankman-Fried hedge fund Alameda Research as collateral for a multi-billion dollar crypto loan. Rival exchange Binance has announced it will sell its stake in FTT, sparking massive withdrawals. The company froze its assets and declared bankruptcy a few days later. Claims from the SEC and CFTC indicated that FTX had mixed customer funds with Alameda Research, resulting in billions of dollars in customer deposits lost along the way.

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