FTX Executives Plead Guilty to Fraud as Bankman-Fried Is Extradited to U.S.

Two former top FTX executives pleaded guilty to fraud and agreed to cooperate with federal prosecutors as the failed cryptocurrency exchange‘s founder, Sam Bankman-Fried, was extradited to New York from the Bahamas to face similar charges.

The guilty pleas from Caroline Ellison, the former CEO of Bankman-Fried’s private hedge fund, Alameda Research, and Gary Wang, co-founder of the now-defunct crypto trading platform, ratchet up pressure on Bankman-Fried, who says he did nothing illegal willingly. Ellison, Bankman-Fried’s former girlfriend, pleaded guilty to seven charges and could face as much as 110 years in prison, while Wang pleaded guilty to four charges and faces up to 50 years of jail time.

Bankman-Fried Extradited

Bankman-Fried arrived in New York on Dec. 21 after agreeing to be extradited and faces charges of fraud from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Bankman-Fried was arrested Dec. 12 in the Bahamas, where FTX was headquartered, after the exchange’s November collapse and was held in a Bahamian prison and received comforts including air conditioning and segregation from the jail’s population.

Potential Bail?

People familiar with the matter have also said that the former FTX CEO is discussing posting bail, a moved that would have to be approved by a judge and could come with restrictive conditions such as home detention.  

The Bottom Line

Legal proceedings in the Bankman-Fried case are just beginning. Many crypto investors have suffered significant losses from the FTX collapse and will be keen to see if it’s possible to recover any of their assets..