The US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have filed new fraud charges against Caroline Ellison, former CEO of Alameda Research, and Gary Wang, former co-founder of FTX.
The new charges by the SEC and CFTC come as they both pleaded guilty to the federal fraud charges filed by the US Department of Justice (DOJ) on December 22.
The SEC claims that Ellison and Wang were indicted for their role in the “multi-year scheme to defraud FTX investors”, and also investigates whether other securities laws were violated.
The SEC alleges that Ellison, under the direction of former FTX CEO Sam Bankman-Fried, furthered the scheme by manipulating the price of FTX Token (FTT)which is described as a cryptocurrency token in the document. Said manipulation was carried out through “the purchase of large quantities on the open market to prop up its price”, which took effect between 2019 and 2022.
As for the CFTC’s allegations, its December 13 fraud complaint against Samuel Bankman-Fried, FTX Trading, and Alameda Research was amended to now include Ellison and Wang as defendants.
The amended complaint now charges Ellison with “fraud and material misrepresentations in connection with the commodity sale of digital assets in interstate commerce.” As for Wang, The former FTX executive has been charged with “fraud in connection with the commodity sale of digital assets in interstate commerce.”
As to the conduct that gave rise to the charges, both the SEC and CFTC allege that Wang created the FTX software code that enabled Alameda to divert funds from FTX clients, which in turn allowed Ellison to misappropriate those funds for Alameda’s business activities.
Former FTX CEO Sam Bankman-Fried also reportedly landed in the United States after being extradited from the Bahamas on fraud charges filed by the US government. The indictment against SBF is signed by the Attorney for the Southern District of New York, Damian Williams, and contains eight counts.
SBF faces charges from the Justice Department, along with the SEC and CFTC, for defrauding investors and lenders. The Royal Bahamas Police detained the former crypto-millionaire on December 12, and his initial request for bail was denied in a Bahamian court.
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