Sam Bankman-Fried (SBF), the FTX founder and former CEO was extradited to the U.S. from the Bahamas and brought before the court. He was released on $250 million bail. Earlier, his former partners and alleged accomplices in the FTX fraud, Caroline Ellison, and Gary Wang, pleaded guilty and announced their cooperation with U.S. authorities. In addition to the criminal charges, the two U.S. regulators, the CFTC and SEC, have also brought fraud charges against the three.
Caroline Ellison, the former CEO of Alameda Research, is considered a key witness in the investigations against SBF and as such she would then only be charged with tax law violations and has been released on $250,000 bail. She had to surrender her passport.
The plea bargain between Ellison and the United States Attorney for the Southern District of New York (SDNY) is allegedly a done deal. This could free the former Alameda chief from all other charges, which together would have resulted in a possible prison sentence of 110 years.
The seven charges against Ellison are as follows: Two counts of financial fraud against FTX customers, an additional two counts of financial fraud of Alameda Research creditors, one count of commodity trading fraud, one count of planning securities fraud against FTX shareholders, and one count of money laundering. The maximum sentence for these crimes would be 110 years of prison time. However, federal prosecutors have agreed with Ellison to drop all seven charges in exchange for full cooperation.
However, the plea agreement does not protect Ellison from other authorities bringing other charges against the former Alameda chief at a later date. It also does not protect from tax law violations if they arise during the investigation.
Meanwhile, former FTX chief Sam Bankman-Fried (SBF) – considered the primary defendant in the case – is in the Federal Bureau of Investigation (FBI) custody and is already being flown back to the U.S., where he is expected to be brought before a judge immediately.