Damian Williams, U.S. Attorney for the Southern District of New York, speaks during a new conference call at the U.S. Attorney’s Office-Southern District of New York (SDNY) in New York, the United States, on Tuesday, March 12, 2022.
jeenah moon | Bloomberg | Getty Images
Federal prosecutors approved plans to allow two of Sam Bankman-Fried’s former lieutenants, Gary Wang and Caroline Ellison, to post bail after both pleaded guilty to assisting a multibillion-dollar scam allegedly run by former FTX CEO Bankman-Fried was committed, court documents show.
Gary Wang was FTX’s chief technology officer. Caroline Ellison was Co-CEO of Alameda Research, Bankman-Fried’s cryptocurrency trading company.
Wang and Ellison would each have to post $250,000 in bail, surrender their passports, and restrict their travel to the continental United States.
In return, the two acknowledged their role in supporting an $8 billion scam that left millions of customers without their investments and destabilized the crypto industry.
Prosecutors will not object to the bail terms, but it’s unclear if a judge will approve them.
Ellison and Wang’s attorneys did not immediately respond to requests for comment.
In a previous statement, Wang’s attorney Ilan Graff, a partner at Fried, Frank, Harris, Shriver & Jacobson, said, “Gary has accepted responsibility for his actions and takes his duties as a cooperating witness seriously.”
In addition to admitting their complicity in FTX’s collapse, Wang and Ellison signed memorandums of understanding with the Commodity Futures Trading Commission, a civil concession Bankman-Fried has yet to make. Wang and Ellison both also filed separate accounts with the Securities and Exchange Commission.
Wang, 29, and Ellison, 28, both pleaded guilty to fraud charges stemming from their executive positions at FTX and Alameda, respectively. They signed their contracts Monday at the US Attorney’s Office in Manhattan.
Whether Bankman-Fried, 30, has struck a plea deal has not yet been announced. In a pre-recorded statement Wednesday night, US Attorney Damian Williams said the accused former FTX CEO was taken into FBI custody after a messy extradition process from the Bahamas.
Bankman-Fried will appear before a judge on Thursday.
Barbara Fried, the mother of FTX founder Sam Bankman-Fried, arrives for his arraignment and bail hearing at Manhattan Federal Court on December 22, 2022 in New York City.
Michael M Santiago | Getty Images
The collapse of FTX was accelerated when CoinDesk’s coverage revealed a highly concentrated position in self-issued FTT coins used by Bankman-Fried hedge fund Alameda Research as collateral for billions of dollars in crypto loans. Binance, a competing exchange, announced it was selling its stake in FTT, resulting in a massive cash withdrawal. The company froze assets and filed for bankruptcy days later. SEC and CFTC indictments indicated that FTX had mixed customer funds with Alameda Research and that billions of dollars in customer deposits had been lost in the process.