Two Executives in Sam Bankman-Fried’s Crypto Empire Plead Guilty to Fraud.

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Caroline Ellison, the former chief executive of Alameda Research, and Gary Wang, a founder of FTX, are cooperating in the federal criminal case against Mr. Bankman-Fried.

Two former top executives of Sam Bankman-Fried’s crypto trading empire have pleaded guilty to federal criminal fraud charges and are cooperating in the prosecution of the disgraced crypto entrepreneur, the U.S. attorney for the Southern District of New York said on Wednesday night.The two are Caroline Ellison, 28, who was the chief executive of the cryptocurrency hedge fund Alameda Research, and Gary Wang, 29, a founder of FTX, the crypto exchange. Caroline Ellison, 28, and Gary Wang, 29, are cooperating in the prosecution of Sam Bankman-Fried, the U.S. attorney for the Southern District of New York says.

The combination of criminal and civil charges against the former top executives puts Mr. Bankman-Fried, 30, in an even more perilous legal position.

The federal government has accused him of orchestrating a sweeping, yearslong fraud that culminated in the bankruptcy of FTX last month after the crypto equivalent of a bank run. Wang and Ms. Ellison were not just close colleagues of Mr. Bankman-Fried.

Bankman-Fried is accused of diverting billions in customer money for other uses, including buying real estate, trading cryptocurrencies and investing in other crypto companies. Prosecutors say he defrauded customers of, investors in and lenders to his crypto trading firm.

FTX co-founder Alameda Bankman-Fried worked with a close circle of colleagues, who followed his directions and played a key role in executing the fraud, the S.E.C. has said. 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,” it says.

The collapse of FTX and the prosecution of Mr. Bankman-Fried have been a major blow to the crypto industry, which has reeled for months as the prices of digital assets such as Bitcoin and Ether have plunged and a procession of major companies have filed for bankruptcy.

Damian Williams: “If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it”.

The collapse of FTX has been a major blow to the crypto industry. The sudden implosion of FTX has unsettled customers of other crypto trading platforms, which are scrambling to assure investors that their money is safe.The guilty pleas by Ms. Ellison and Mr. Wang could push other former high-ranking executives to cooperate with the authorities in the case against Mr. Bankman-Fried, who faces charges including fraud, money laundering and campaign finance offenses.

In a videotaped statement on Wednesday night, Damian Williams, the U.S. attorney, said Mr. Wang and Ms. Ellison were charged “in connection with their roles in the frauds that contributed to FTX’s collapse.”Mr.

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