: Caroline Ellison of Alameda and Gary Wang of FTX have pleaded guilty to fraud charges by the Department of Justice, as well as settling with the SEC and CFTC.

•Former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang pleaded guilty to charges tied to FTX’s collapse.
•The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) also charged the two, alleging Ellison manipulated the price of FTT at exchange founder Sam Bankman-Fried’s direction.
•FTX founder Sam Bankman-Fried was charged with eight crimes by the U.S. Attorney for the Southern District of New York (SDNY) earlier this month and is being extradited to the U.S.

On Wednesday night, U.S. Attorney Damian Williams announced that former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang had both pleaded guilty to charges related to the collapse of FTX. The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) also announced charges against the two, alleging that Ellison had manipulated the price of FTT at the direction of FTX founder Sam Bankman-Fried.

The SEC’s complaint stated that Bankman-Fried had made public statements, and provided investors with documentation via audited financial statements, that Alameda had not received any preferential treatment from FTX. However, the complaint alleged that Bankman-Fried and Ellison had surreptitiously siphoned customer funds from FTX onto the books of Alameda, thus hiding the risks faced by FTX’s investors and customers.

The CFTC’s complaint alleged that Ellison had committed fraud and made “material misrepresentations” tied to the FTT sales, while alleging Wang had “allowed Alameda to maintain an essentially unlimited line of credit on FTX.”

The charges against Bankman-Fried, which include money laundering, wire fraud, securities fraud and campaign finance violations, were announced by the SDNY earlier this month. Williams confirmed in his statement that the FTX founder was in FBI custody and would appear in court “as soon as possible.”

Ellison, who is thought to reside in Hong Kong or Nassau, was spotted in Manhattan at a coffee shop in early December, leading many to suspect she was working with authorities. She subsequently retained the law firm WilmerHale to represent her, and it was noted that one of their top attorneys is Stephanie Avakian, a former director of the SEC’s Division of Enforcement.

Williams warned that if anyone was involved in misconduct at FTX or Alameda, now was the time to get ahead of it. He emphasized that the authorities were moving quickly and that their patience was not eternal.

The news of the guilty pleas and charges against Ellison and Wang comes in the wake of the collapse of FTX, which was brought about by Binance CEO Changpeng Zhao’s announcement in early November that he planned to sell his remaining holdings of FTX’s FTT token. The SEC’s complaint noted that Ellison had tweeted an offer to buy Binance’s entire stake of FTT for $22, at the direction of Bankman-Fried.

It is clear that the authorities are taking the matter of FTX’s collapse seriously, and are attempting to get to the bottom of the matter as quickly as possible. It remains to be seen what the consequences of the guilty pleas and charges will be, but it is certain that the future of FTX and the individuals involved is far from certain.