The stunning bankruptcy of one of the most prominent companies in the cryptocurrency industry has quickly turned into a legal battle between a former executive and a former lover’s partner.
When FTX founder Sam Bankman-Fried was extradited from the Bahamas to the United States last week, two of his former business partners pleaded guilty to multiple fraud and collusion charges.
Former CEO of cryptocurrency hedge fund Alameda, 28-year-old Caroline Ellison has apologized before federal court in New York, saying she and her former colleagues were deliberately accused by Bankman-Fried’s FTX exchange customers of Steal billions of dollars and cover it up, according to multiple news reports citing court records.
Ellison said in court, “I’m really sorry for what I did. I knew it was wrong.”
Ellison has been charged with seven counts, including wire fraud and money laundering conspiracy. She and Bankman-Fried were close business associates who dated briefly.
Another associate, former FTX Chief Technology Officer Gary Wang, pleaded guilty to four counts of similar charges.
Both Ellison and Wang are cooperating with federal prosecutors, which could put them at a disadvantage as witnesses against Bankman-Fried, who has repeatedly denied that he willfully defrauded customers and investors.
Bankman-Fried, 30, appeared in a US court in New York on Thursday, where a federal judge released him after posting $250 million in bail. He must surrender his passport and continue his house arrest at his parents’ home in Palo Alto, California.
$250 million is an outrageous sum, but Bankman-Fried won’t have to pay unless he violates the terms of his bail agreement or fails to appear in court. An atypical bail plan was agreed as part of his commitment to waive his extradition dispute.
After appearing in court, Bankman-Fried spotted In a business class lounge at New York’s John F. Kennedy International Airport. Cryptocurrency reporter Tiffany Fong also tweeted a photo of Bankman Fried on an American Airlines flight.
Bankman-Fried’s legal team confirmed to CNN Business that he arrived in Palo Alto and is home with his parents. His attorney declined to comment on the guilty pleas by Ellison and Wang.
A federal judge said Thursday Bankman-Fried will be arraigned on eight crimes, including fraud and conspiracy, at an unspecified future date.
Prosecutors say Bankman-Fried orchestrated “one of the biggest financial scams in American history” and stole billions from FTX customers to cover losses at Alameda and enrich themselves. claim. If convicted, he could face life in prison.
Bankman-Fried tried to portray himself as an ill-fated entrepreneur who went skiing before being arrested in the Bahamas earlier this month. He apologized repeatedly to his customers and FTX staff, “fed up,” while denying that he deliberately deceived anyone.
— CNN’s Kara Scannell contributed to the report.