FTX was until a few weeks ago the second largest cryptocurrency exchange company in the world. However, the empire collapsed, announcing that it was bankrupt and owed $1.45 billion to its 10 creditors.
The blame was admitted by Caroline Ellison, famous for being considered a math genius. “I’m really sorry for what I did, I knew it was wrong,” he said according to a transcript of his hearing before a judge in Manhattan.
Ellison, 28, former CEO of Alameda Research – a cryptocurrency trading company started in 2017 by her ex-partner Sam Bankman-Fried, founder and former president of FTX – acknowledged having been to blame for the bankruptcy.
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The executive accepted two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit commodity fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering.
These seven offenses could result in her being sentenced to 110 years in prison and millions of dollars in potential penalties, according to Reuters. Last November, FTX decided to file for the protection of Chapter 11 of the United States Bankruptcy Law.
According to the Colombian outlet Semana, during the time she was the head of Alameda, Caroline helped her boyfriend Sam move more than 10 billion dollars of client money to all kinds of tax havens. Caroline Ellison became so prestigious that she was even considered in the list “30 under 30” (30 under 30) of Forbes magazine.
But the scale of the scandal has been such that the New York Post has compared it to the Enron cases or Bernie Madoff’s Ponzi scheme. According to the New York outlet, Bankman-Fried was the one who promoted Ellison to direct Alameda after removing her from the Jane Street firm in 2018.
The two became a couple. The two, along with eight other young tech executives, ran the companies while living together in Bankman-Fried’s $40 million penthouse in the Bahamas. Although FTX says it owes around $1.45 billion to its top 10 creditors, the platform owes its 50 largest creditors almost $3.1 billion, according to a court filing cited by a BBC Mundo note.
Cryptocurrency manipulation; The United States Stock Exchange (SEC) charged Ellison, Gary Wang, and Zixiao Wang with manipulating the company’s internal cryptocurrency, misleading investors, and misusing FTX client assets.
The FTX firm was a hoax from the start. Bankman-Fried “orchestrated a massive, years-long fraud, diverting billions of dollars of client funds from the trading platform for his own personal gain and to help grow his cryptocurrency empire,” the SEC noted. , who filed civil charges.
As part of their deception, we allege that Caroline Ellison and Sam Bankman-Fried planned to manipulate the price of FTT, a cryptosecurity token exchange that was an integral part of FX, to prop up their house of cards, the SEC said in a statement.
After their cooperation with the US Attorney’s Office for the Southern District of New York, Ellison and Wang had to post a $250 million bail to be released. Bankman-Fried, 30, pleaded “not guilty” on Tuesday, November 3, 2022, before the New York court investigating the case.
Sam Bankman-Fried is charged with eight counts for the $8 billion he left behind in the bankrupt firm, with hundreds of thousands of clients harmed. These crimes are investor and lender fraud, money laundering conspiracy, fraud in the stock markets and even illicit campaign financing, offenses punishable by a maximum of 15 years in prison.
Although he is on probation, he was detained in the Bahamas, at the request of the United States, after being confined in a jail, and accepted his extradition. October 2 will be the tentative trial date. Bond to remain confined at his family’s home in Palo Alto was provided by his parents, Stanford University professors, and two other guarantors who requested anonymity.