Two associates of FTX founder Sam Bankman-Fried have pleaded guilty for their roles in fraud that contributed to the cryptocurrency exchange’s collapse and are cooperating with federal investigators.

Caroline Ellison, the former chief executive of Alameda Research, a trading firm tied to FTX, and Gary Wang, FTX’s former chief technology officer, both pleaded guilty to criminal offences similar to those Bankman-Fried was charged with last week.

Damian Williams, the US attorney for the Southern District of New York, announced the charges and plea agreements in a video posted online on 21 December. Williams called for others who participated in alleged misconduct at FTX or Alameda to come forward.

“We are moving quickly and our patience is not eternal,” he said.

The announcement came shortly after Bankman-Fried had been transferred to US custody in the Bahamas, where he was arrested last week.

Ellison, 28 years old, pleaded guilty to seven counts, including wire fraud and conspiracy to commit securities fraud, according to her plea agreement, which was signed Monday. Wang, 29, pleaded guilty to four counts, including wire fraud.

Ilan Graff, a lawyer for Wang, said in a statement, “Gary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness.” An attorney forEllison declined to comment.

The Securities and Exchange Commission and Commodity Futures Trading Commission also sued Ellison and Wang, alleging they committed civil securities and commodities fraud. Both agreed to settle the SEC’s and CFTC’s claims and to accept liability, with monetary penalties to be decided in the future, according to the regulators.

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Bankman-Fried, 30, is expected to appear in federal court in Manhattan as soon as 22 December. Prosecutors have charged him with eight criminal counts, alleging he defrauded customers, lenders and investors, in addition to making illegal political donations.

Ellison, who graduated from Stanford University in 2016, was previously a trader at Jane Street, a quantitative-trading firm. She met Bankman-Fried at Jane Street, and after he left to found Alameda, she joined him. Ellison and Bankman-Fried were at times romantically involved, The Wall Street Journal has previously reported.

Wang worked as a software engineer at Google before co-founding Alameda and FTX. He claims to have built systems to aggregate prices across millions of flights at Google, according to an FTX pitchdeck viewed by The Wall Street Journal.

A graduate of the Massachusetts Institute of Technology, Wang and Bankman-Fried were members of the same coed living group, Epsilon Theta.

According to their plea agreements, Ellison and Wang are expected to truthfully disclose information to investigators, provide requested evidence and appear in front of a grand jury or court proceeding if asked. In exchange, the government will inform the judge of the defendants’ assistance and request lesser sentences.

The SEC said Ellison, from 2019 to 2022, manipulated the price of FTT, a digital asset that FTX issued. Ellison did so at the direction of Bankman-Fried, according to the SEC. The price manipulation allowed Alameda to inflate the value of FTT that it held and used as collateral for undisclosed loans from FTX customers, the SEC said.

Bankman-Fried on at least two occasions became worried about the price of FTT dropping and told Ellison to have Alameda buy FTT, the SEC’s complaint says. Binance, a rival crypto exchange, was also a large holder of FTT tokens; its announcement in November that it would sell its FTT stake caused the price of the token to plummet, although Ellison had offered publicly to buy Binance’s holdings of FTT at $22 each.

The SEC alleged that FTT is a security, giving the agency authority to oversee how it was traded. FTX’s profits from selling FTT to investors helped fund the exchange’s growth and development, the SEC said.

Ellison was the co-CEO of Alameda from late 2021 until August, when she took the title exclusively. Like many of Bankman-Fried’s lieutenants, she worked in Hong Kong and the Bahamas. Though she was CEO, Bankman-Fried owned 90% of Alameda and Wang owned the other 10%, according to bankruptcy court filings.

Even after Ellison became co-CEO, Bankman-Fried directed investment and operational decisions, frequently communicated with Alameda employees and had full access to Alameda’s records and databases, the SEC said.

Wang wrote the software code that allowed Alameda to access FTX customers’ funds, according to the SEC.

“Ellison and Wang played an active role in a scheme to misuse FTX customer assets to prop up Alameda and to post collateral for margin trading,” SEC Chair Gary Gensler said. “When FTT and the rest of the house of cards collapsed, Bankman-Fried, Ellison, and Wang left investors holding the bag.”

In May, when digital assets plummeted amid the $40bn crash of TerraUSD and Luna and crypto lenders recalled billions of dollars in loans from Alameda, Bankman-Fried directed billions in FTX customer assets to Alameda so that the trading shop could maintain its lending relationships, the SEC said. Wang and Ellison were aware of the transfer of funds and Ellison then used FTX customer’s assets to repay Alameda’s debts, according to the complaint.

The SEC also alleged that Ellison knew Bankman-Fried had directed FTX customers to send funds to bank accounts in the name of North Dimension — an Alameda subsidiary that doesn’t disclose its connection to Alameda on its website — in an effort to hide the fact that the funds were being sent to Alameda-controlled accounts.

—Hannah Miao and Vicky Ge Huang contributed to this article.

Write to Corinne Ramey at and Dave Michaels at

This article was published by The Wall Street Journal, part of Dow Jones

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