The legal consequences of FTX’s collapse took a new twist Wednesday night when the Justice Department and Securities and Exchange Commission announced charges against the girlfriend of co-founder Sam Bankman-Fried. , Caroline Ellison, with the SEC’s allegation that she manipulated the price of the exchange’s FTT token collapse.
For many years, Ellison was a close aide to Bankman-Fried and served as CEO of his hedge fund, Alameda Research, which allegedly took money from FTX clients to cover trading losses. his translation. The New York Times confirmed recently speculate that she is cooperating as a Justice Department witness on their investigation into Bankman-Fried’s alleged criminal activities, and reported that Ellison pleaded guilty.
During a press conference, a prosecutor of the Ministry of Justice announced The agency has filed fraud-related criminal charges against Ellison and FTX’s chief technology officer, Zixiao (Gary) Wang.
According to the SEC, Ellison participated in a scheme to support the price of the FTT token — which FTX uses as collateral for unsecured loans — on the open market.
“The complaint alleges that, by manipulating the price of FTT, Bankman-Fried and Ellison caused the valuation of Alameda’s FTT holdings to inflate, thereby driving the value of the collateral across the board. Alameda’s balance sheet is overstated and misleads investors about FTX. risk,” the SEC said in a statement Press Release about fees.
In the case of Wang, the chief executive officer of FTX, the SEC claimed that he improperly redirected client assets to Alameda.
The SEC does not have the power to impose criminal penalties on individuals, which means the charges do not carry the risk of jail time. Instead, the agency is seeking to ban Ellison and Wang from trading in securities and is seeking to recover any profits they made from the alleged scheme.
Meanwhile, Bankman-Fried – who is facing a series of criminal charges – was transferred from a prison in the Bahamas to a Brooklyn jail on Wednesday night.
The news of Ellison came two weeks after she was discovered at a New York City coffee shop, which sparked rumors that she was a cooperating witness — even though the agency or Ellison has not confirmed this.
In its announcement, the SEC said both Ellison and Wang cooperated with the agency and entered into settlements related to a number of allegations.
This story has been updated from the original to provide more details.
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