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FTX founder Sam Bankman-Fried’s ex-girlfriend and former best friend are set to give evidence against the former billionaire after cutting a plea deal with prosecutors, major U.S. media have reported.
This case is one of the biggest corporate fraud cases in U.S. legal history.
Cooperating with investigations
Caroline Ellison, 28, the ex-girlfriend of Bankman-Fried and chief executive of his personal cryptocurrency hedge fund, and Gary Wang, 29, FTX’s former chief technology, are both cooperating with the investigation.
Ellison was joint chief executive of Alameda Research.
Wang was FTX co-founder and former technology head.
They have been freed on bail of US$250,000 each.
This was revealed by prosecutors in New York said on Dec. 22, after Bankman-Fried landed in New York following his extradition from the Bahamas, where FTX was based.
The 30-year-old former wunderkind, also known as SBF, was accompanied by officials from the FBI and the U.S. Marshals Service.
Facing long jail terms without plea bargain
Ellison and Wang may be asked to give evidence against him in court as they can be required to provide evidence about FTX and the actions of Bankman-Fried.
Ellison and Wang are cooperating after both pleading guilty to defrauding investors.
Ellison faces a prison sentence of up to 110 years.
Wang faces up to 50 years in prison.
Wang, who owned 10 per cent of Alameda, allegedly built a system that allowed Bankman-Fried to bypass controls at the hedge fund, giving Alameda an unfair advantage when trading.
Ellison, acting on the orders of Bankman-Fried, is alleged to have manipulated the price of a cryptocurrency token developed by FTX in order to fund billions of dollars in loans.
Bankman-Fried is accused of overseeing one of the biggest investor frauds in U.S. history.
He could be sentenced up to 170 years in jail stemming from a raft of criminal charges that carry hefty prison terms.
Manhattan prosecutor Damian Williams announced the plea deals with Ellison and Wang in a video posted on Twitter on Wednesday night.
Williams urged others involved in the alleged fraud to come forward.
He said: “We are moving quickly and our patience is not eternal.”
Background
Bankman-Fried is accused by U.S. authorities of conducting a massive fraud at FTX using customer funds.
The collapse of US$32 billion cryptocurrency exchange FTX on Nov. 11 has left more than one million creditors out of pocket.
Bankman-Fried allegedly used FTX customers’ deposits to fund risky bets on digital tokens at his hedge fund, Alameda Research.
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