Prosecutors for FTX co-founder and CEO Sam Bankman-Fried just won a major victory by unmasking two of his alleged accomplices against him.
It’s amazing how much things can change in just a few weeks. At the beginning of November, Bankman-Fried (SBF) is a cryptocurrency billionaire and the face of one of the largest cryptocurrency exchanges in the world. About seven weeks later, the three letters “SBF” are practically synonymous with misconduct in the crypto world, and Bankman-Fried’s prospects for a light sentence – not to mention acquittal – are rapidly diminishing. .
On Wednesday, federal prosecutors announced that Alameda Research CEO Caroline Ellison pleaded guilty to a series of fraud charges. Alameda Research is a hedge fund affiliated with FTX, where SBF allegedly funds risky investments with FTX deposits. Ellison faces up to 120 years in prison.
FTX co-founder Gary Wang also pleaded guilty to fraud and faces up to 50 years in prison.
Both Ellison and Wang agreed to cooperate with prosecutors in the case against Bankman-Fried.
As for SBF, after spending a week and a half in a Bahamian prison, the now-disgraced former crypto mogul has… extradition to the US on Wednesday night. On Thursday, a New York judge approved bonds worth $250 million for the release of SBF.
FTX was once one of the largest cryptocurrency exchanges in the world. Not long before the crash, FTX was valuable at $32 billion. In November, reports from Coindesk and independent crypto investigator Mike Burgersberg revealed that FTX’s hedge fund, Alameda Research, appeared to be insolvent. Due to this news, competing crypto exchange Binance Sold out holds FTX’s own cryptocurrency token, FTT. FTX clients followed suit, with billions of dollars withdrawn from the exchange.
As of November 11, FTX has applied for bankrupt and SBF has resigned as CEO.
On December 12, SBF was arrest in the Bahamas. He faces numerous federal charges related to wire fraud, money laundering and even violating campaign finance laws.