Bankman-Fried execs likely to be freed on bail after FTX fraud pleas

Damian Williams, US attorney for the Southern District of New York, speaks during a new conference at the US Attorney’s Office-Southern District of New York (SDNY) in New York, US, on Tuesday, Dec. 13, 2022.

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Federal prosecutors endorsed plans to allow two former Sam Bankman-Fried lieutenants, Gary Wang and Caroline Ellison, to post bail after both pleaded guilty to supporting a multibillion-dollar fraud allegedly perpetrated by former FTX CEO Bankman-Fried, court documents show.

Gary Wang was the chief technology officer of FTX. Caroline Ellison was the co-CEO of Alameda Research, Bankman-Fried’s crypto trading firm.

The duo would be required to post $250,000 in bail each, surrender their passports and restrict their travel to the continental United States.

In return, the pair conceded their role in supporting an $8 billion fraud that left millions of customers without their investments and destabilized the crypto industry. Prosecutors won’t object to these conditions, but it’s unclear at this time whether Ellison and Wang will face opposition from a judge as it relates to their bail conditions.

Attorneys for Ellison and Wang did not immediately return requests for comment.

In an earlier statement, Wang’s attorney Ilan Graff, a partner at Fried, Frank, Harris, Shriver & Jacobson, said that “Gary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness.”

In addition to admitting their complicity in the collapse of FTX, the pair also signed consent orders with the Commodity Futures Trading Commission, a civil concession that Bankman-Fried has yet to make.

Wang, 29, and Ellison, 28, both pleaded guilty to fraud charges stemming from their leadership positions at FTX and Alameda, respectively. The pair signed their deals in the Manhattan U.S. Attorney’s Office on Monday.

A plea deal for Bankman-Fried has not yet been disclosed. In a pre-recorded statement last night, U.S. Attorney Damian Williams said that the 30-year-old indicted former FTX CEO had been taken into Federal Bureau of Investigation custody after a chaotic Bahamas extradition process.

Bankman-Fried will appear before a judge on Thursday.

Barbara Fried, the mother of FTX founder Sam Bankman-Fried, arrives for his arraignment and bail hearings at Manhattan Federal Court on December 22, 2022 in New York City.

Michael M. Santiago | Getty Images

FTX’s collapse was precipitated when reporting by CoinDesk revealed a highly concentrated position in self-issued FTT coins, which Bankman-Fried’s hedge fund Alameda Research used as collateral for billions in crypto loans. Binance, a rival exchange, announced it would sell its stake in FTT, spurring a massive withdrawal in funds. The company froze assets and declared bankruptcy days later. Charges from the SEC and CFTC indicated that FTX had commingled customer funds with Bankman-Fried’s crypto hedge fund, Alameda Research, and that billions in customer deposits had been lost along the way.

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