Associates of FTX co-founder Sam Bankman-Fried plead guilty to criminal charges

NASSAU, Bahamas (AP) — Two associates of Sam Bankman-Fried have pleaded guilty to criminal charges related to the collapse of the cryptocurrency exchange FTX in cooperation deals, a federal prosecutor announced Wednesday as Bankman-Fried was on his way back to the United States from the Bahamas. [caption id=“attachment_11852771” align=“alignnone” width=“640”] Two of Sam Bankman-Fried’s closest associates have pleaded guilty to a number of criminal charges, in a plea bargain which would make them testify against FTX co-founder. The 30-year-old could spend the rest of his life in jail if convicted.[/caption] Carolyn Ellison, the former CEO of Alameda Research, a trading firm started by Bankman-Fried, and Gary Wang, who co-founded FTX along with Bankman-Fried, pleaded guilty to charges “related to their roles in the fraud that contributed to FTX’s collapse,” US Attorney Damian Williams said Wednesday night in a videotaped statement released on social media. “They are both cooperating with the Southern District of New York,” Williams said, adding that anyone else who participated in the fraud should also reach out to his office because “our patience is not eternal." The guilty pleas were announced as Bankman-Fried was being flown to the US from the Bahamas by US law enforcement to answer to charges tied to his role in FTX’s failure. He was expected to appear in Manhattan federal court on Thursday. In agreements signed with prosecutors on Dec. 19, Ellison and Wang agreed to plead guilty to charges including wire fraud, securities fraud and commodities fraud in return for leniency at sentencing if they cooperate fully. Williams said the guilty pleas and the transfer of Bankman-Fried to New York was in connection with a “sweeping fraud scheme that contributed to FTX’s collapse and for a campaign finance scheme that sought to influence public policy in Washington." Bankman-Fried was on his way to the United States after waiving his right to challenge the extradition. Reporters on the scene witnessed Bankman-Fried leaving a Magistrate Court in Nassau in a dark SUV earlier Wednesday. “The Bahamas has determined that the provisional arrest, and subsequent written consent by (Bankman-Fried) to be extradited without formal extradition proceedings satisfies the requirements of the (extradition treaty between the US and the Bahamas) and our nation’s Extradition Act,” said Bahamian Attorney General Ryan Pinder, in a statement. Bahamian authorities arrested Bankman-Fried last week at the request of the US government. US prosecutors allege he played a central role in the rapid collapse of FTX and hid its problems from the public and investors. The Securities and Exchange Commission said Bankman-Fried illegally used investors’ money to buy real estate on behalf of himself and his family. The 30-year-old could potentially spend the rest of his life in jail. Bankman-Fried was denied bail Friday after a Bahamian judge ruled that he posed a flight risk. The founder and former CEO of FTX, once worth tens of billions of dollars on paper, had been held in the Bahamas’ Fox Hill prison, which has been has been cited by human rights activists as having poor sanitation and as being infested with rats and insects. Once he’s back in the US, Bankman-Fried’s attorney will be able to request that he be released on bail. Bankman-Fried was one of the world’s wealthiest people on paper, with an estimated net worth of $32 billion. He was a prominent personality in Washington, donating millions of dollars toward mostly left-leaning political causes and Democratic political campaigns. FTX grew to become the second-largest cryptocurrency exchange in the world. He has said that he did not “knowingly” misuse customers’ funds, and said he believes his millions of angry customers will eventually be made whole. At a congressional hearing last week, the new FTX CEO John Ray III, who is tasked with taking the company through bankruptcy, bluntly disputed those assertions: “We will never get all these assets back,” Ray said.