FTX’s Ellison, Wang plead guilty to 11 fraud charges, with up to 160 years in prison between them
- Wang, the former chief technology officer of FTX, pleaded guilty to four counts of fraud, which could have him face 50 years in prison
- Ellison, the former CEO of FTX’s trading arm Alameda Research, pleaded guilty to seven counts, which carry a maximum sentence of 110 years in prison
Two former FTX executives pleaded guilty to United States federal charges in relation to the collapse of the world’s second-largest cryptocurrency exchange, as their ex-colleague and founder Sam Bankman-Fried is extradited to the US to face charges.
Wang, a former Google engineer, alumnus of the Massachusetts Institute of Technology (MIT) and housemate of SBF, as Bankman-Fried is known, accepted the guilty plea to four counts of fraud that could have him face 50 years in prison, court documents show. Ellison pleaded guilty to seven counts, which carry a maximum sentence of 110 years in prison.
The two, who shared a US$30 million penthouse in The Bahamas with SBF and a tiny circle of FTX insiders, were also charged by the US Securities and Exchange Commission (SEC) for their roles in a “multi-year scheme” to defraud FTX’s equity investors, according to a statement published by the SEC on Thursday.
The charges on Wang and Ellison widened the dragnet over FTX’s November 11 bankruptcy under US$3 billion of debt. The probes had previously focused on the role played by SBF, the public face of the cryptocurrency exchange, whose messages of financial disruption, innovation and “effective altruism” has taken him as recently to a speaking slot at Hong Kong’s FinTech week days before he declared bankruptcy.
Ellison was involved in manipulating the price of FTT, the native token issued by FTX, between 2019 and 2022, while Wang the former CTO created software code that allowed FTX customer assets to be diverted to Alameda, according to the SEC.
“Bankman-Fried, Ellison, and Wang were active participants in a scheme to conceal material information from FTX investors …” said Sanjay Wadhwa, Deputy Director of the SEC’s Division of Enforcement. “By surreptitiously siphoning FTX’s customer funds onto the books of Alameda, defendants hid the very real risks that FTX’s investors and customers faced.”
Ellison and Wang are now cooperating with both the US Attorney’s Office for the Southern District of New York and the SEC in their investigations, according to the prosecutors’ statements.
Before reportedly being spotted in New York earlier this month, Alameda’s Ellison had been in Hong Kong in late November, according to multiple media reports.
FTX remnants remind Hong Kong of the bullet it dodged
Ellison was also active in Hong Kong’s rationalist community, a loosely organised group of people interested in statistics-based decision-making, which overlaps with effective altruism, the philosophically-driven ethos that guided her and SBF to make as much money as possible to give away to charities they believed would help the most people.
