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Investing.com – Gary Wang, co-founder of FTX, and Caroline Elison, the former CEO of sister company Alameda Research, have pleaded guilty to fraud charges and are cooperating with authorities in the investigation into the steep stock market crash of cryptocurrencies, a US court ruled on Wednesday.
The latest development in the FTX debacle was announced by Damian Williams, U.S. Attorney for the Southern District of New York (SDNY) in a statement late Wednesday. Mr. Williams also confirmed that former FTX director Sam Bankman-Fried was in the custody of the Federal Bureau of Investigation (FBI) and was in the process of being extradited from the Bahamas to the United States.
Bankman-Fried has been charged with fraud by US authorities for allegedly mixing FTX client funds with those of its trading desk Alameda Research, resulting in the loss of more than $8 billion in funds.
SDNY’s Mr Williams said the FTX investigation was progressing rapidly and the court expected to make further announcements about it in the near future. He also encouraged anyone who has done wrongdoing with FTX to “take the lead.”
“We are moving fast, and our patience is not forever,” Williams said in a video uploaded to Twitter (NYSE:).
Separately, the U.S. Securities and Exchange Commission also indicted Elison and Wang for their role in a “multi-year scheme to defraud stock investors” of FTX. The SEC alleges that Elison manipulated the price of FTX’s native token, FTT, for nearly three years, at the direction of Bankman-Fried.
Wang also transferred client funds from FTX to Alameda, according to the SEC.
Bankman-Fried had unexpectedly requested his extradition from the Bahamas to the United States earlier this week. He now faces multiple fraud charges and is expected to appear in court “as soon as possible”, SDNY’s Mr Williams said.
The FTX founder was charged with fraud by the SDNY earlier this month, and was later arrested and detained in the Bahamas.
FTX’s collapse is the latest in a string of high-profile bankruptcies in the cryptocurrency market this year. Contagion fears have led to sizable losses on the and other cryptocurrencies over the past month.
By Ambar Warrick