Former FTX and Alameda Research Executives, Wang and Ellison Plead Guilty and are Cooperating with Police

The Verge | Richard Lawler and Elizabeth Lopatto | Dec 21, 2022

Image: Unsplash/Mariia Shalabaieva

Former FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison are facing up to 50 years and 110 years in prison, respectively.

• Caroline Ellison and Zixiao “Gary” Wang, two executives in Sam Bankman-Fried’s fallen crypto empire, have pleaded guilty to federal charges and are cooperating with prosecutors. The news was announced late Wednesday by Damian Williams, the US Attorney for the Southern District of New York.
  • Wang was a co-founder of the FTX cryptocurrency exchange and owned 10 percent of Alameda Research. (Bankman-Fried owned the other 90 percent.) Ellison served as CEO of Bankman-Fried’s trading company Alameda Research.
  • Ellison pleaded guilty to seven counts, according to The Washington Post. She faces up to 110 years in prison, WaPo says. Wang pleaded guilty to four counts and faces up to 50 years in prison.

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• The  US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have already filed updated civil suits, including details on Wang and Ellison’s roles. “Wang, with Ellison’s knowledge and consent, exempted Alameda from the risk mitigation measures” FTX used, providing Alameda Research with a “virtually unlimited ‘line of credit,’” according to the updated SEC complaint.
• Alameda got ahold of FTX customer funds in two ways: first, by the “line of credit” but also by directing customers to deposit fiat currency into accounts controlled by Alameda. “As a result, there was no meaningful distinction between FTX customer funds and Alameda’s own funds,” the SEC suit says.

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