Sam Bankman-Fried associates Gary Wang, who co-founded FTX, and Caroline Ellison, who served as the CEO of Bankman-Fried’s crypto hedge fund company Alameda Research, both pled guilty to various charges related to the collapse of FTX just a few weeks ago. Now the world waits to see what happens to Bankman-Fried himself when he finally appears in court.
U.S. Attorney Damian Williams revealed the guilty pleas, but he did not specify exactly what charges the former FTX people pled guilty to, nor what sentences they may be facing. It can be inferred at this time, however, they did enter into some sort of plea bargain.
Caroline Ellison, 28, was said to have been romantically involved with Bankman-Fried. Among the charges leveled against the two is that they allegedly “embezzled” funds that belonged to FTX depositors and invested them in Alameda Research.
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As for Sam Bankman Fried, he was deported from the Bahamas on Wednesday night and is now in custody in New York.
As of now, Sam Bankman-Fried stands accused of eight counts of fraud and conspiracy. If convicted on all counts, he could be sentenced to as much as 115 years in jail. The charges came after his FTX crypto currency exchange company went bust a few weeks ago. The big question over the fall of FTX is “what happened to all of the money that people left with the company?” FTX was a crypto bank, so to speak, a place where people could park their virtual assets. But unlike with banks, there is no regulation over the handling of cryptos and FTX is said to have moved people’s cryptos around, basically that the company spent their money.
Based in the Bahamas, FTX was a cryptocurrency exchange that said it was built by traders, for traders. FTX offers industry-first derivatives, options, volatility products and leveraged tokens. FTX has more than one million traders using its services.
But FTX, it seems, was really nothing more than a house of cards built upon its own assets. The company’s net worth was based on ownership of its own tokens. This means that FTX claimed to be wealthy because it owned the same crypto tokens the company issued. And these tokens had no tangible net worth.