Carolyn Ellison and Gary Wang: Co-founder of FTX and former head of hedge fund Alameda Research, each pleaded guilty to multiple charges, and are cooperating with the feds.

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Two associated CEOs Cryptocurrency exchange FTX has collapsed He pleaded guilty to multiple felony charges and is cooperating with federal prosecutors, according to unsealed court records. In addition, the pair is facing civil fraud charges from the Securities and Exchange Commission that were announced on Wednesday night.

Gary Wang, co-founder of FTX, and Caroline Ellison, who served as CEO of Alameda Research hedge fund, pleaded guilty to several counts of conspiracy and fraud. For their role in the fraud scheme that led to the collapse of the cryptocurrency trading platform.

Damian Williams, the US Attorney for the Southern District of New York, announced the charges in a video message on Wednesday night. In a brief statement, he affirmed that the investigation is still ongoing, specifically indicating that these new charges in the case are not the last.

“Gary has accepted responsibility for his actions and takes his obligations as a cooperating witness very seriously,” said Ilan Graf, Wang’s attorney. Wang has already appeared in court due to his guilty plea.

Ellison’s lawyer could not be reached for comment.

The charges were disclosed on behalf of Sam Bankman-Fried was on his way to the United States from the Bahamas, where he was arrested last week on an eight-count indictment in what Williams described as one of the largest financial frauds in American history. Bankman-Fried waived his right to challenge his extradition on Wednesday and boarded a flight to the United States in the early evening.

Bankman Fried is expected to appear before a judge in Manhattan on Thursday. Prosecutors and his attorneys have been in discussions about a bail package that would allow him to avoid detention, people familiar with the matter told CNN.

Wang co-founded FTX with Bankman-Fried in 2019 and also worked with him on his Alameda Research hedge fund. Ellison became CEO of Alameda in October 2021, according to court filings.

Prosecutors allege that Bankman Fried was involved in several fraudulent schemes. Among them, they allege Bankman-Fried stole money from FTX clients to support Alameda, made investments in other companies, bought luxury real estate and donated tens of millions of dollars to political campaigns.

In letters dated Sunday, December 18, and signed the following day, Ellison and Wang agreed to plead guilty and cooperate with prosecutors.

Ellison pleads guilty to seven counts, including wire fraud, conspiracy to commit money laundering, conspiracy to commit securities fraud, conspiracy to commit commodity fraud, and conspiracy to commit fraud. She is charged with the same crimes as Bankman-Fried, except for the campaign finance charges.

Wang agreed to plead guilty to four counts: wire fraud, conspiracy to commit wire fraud, conspiracy to commit commodity fraud and conspiracy to commit securities fraud.

“As I said last week, this investigation is very ongoing and moving very quickly,” Williams said. “I also said that last week’s announcement wouldn’t be the last, and let me be clear, again, this is not the day.”

Federal regulators have also accused Ellison and Wang of playing starring roles in a years-long scheme to defraud FTX investors.

The SEC alleges that Ellison and Wang actively participated in a “scheme to defraud” investors. Between 2019 and 2022, Ellison manipulated the price of FTT, FTX’s security token, “at the direction” of Bankman-Fried, the regulators alleged. The SEC said the manipulation was accomplished by buying large quantities of FTT on the open market to support its price.

Regulators say this alleged manipulation inflated Alameda’s holdings, overstated the hedge fund’s balance sheet and “misled” investors about FTX’s exposure to risk.

“When FTT and the rest of the house of cards collapsed, Mr. Bankman Fried, Mrs. Ellison and Mr. Wang left investors holding the bag,” SEC Chairman Gary Gensler he said in a statement.

Wang created the FTX source code that allowed Alameda to transfer FTX clients’ funds and Ellison used the embezzled funds for his hedge fund trading activity, according to the Securities and Exchange Commission.

“Ellison and Wang were active participants in a scheme to defraud FTX investors and engaged in conduct that was critical to its success,” the Securities and Exchange Commission (SEC) he said in a statement.