Key Takeaways:
- Caroline Ellison, Sam Bankman-Fried's girlfriend, has entered a plea agreement.
- The agreement means the former Alameda CEO would only face criminal tax violation charges.
- The SEC also brought up charges against Ellison.
NEW DELHI (CoinChapter.com) — Caroline Ellison, former Alameda Research CEO and disgraced crypto guru Sam Bankman-Fried’s girlfriend, has entered a plea deal with the Office of the US Attorney for the Southern District of New York (SDNY).
Ellison, a key witness in the ongoing FTX investigation, might evade all the seven counts of allegations against her. The prosecutors would only try 28-year-old Ellison for criminal tax violations as part of the plea deal. The plea deal would also help the former Alameda CEO avoid up to 110 years sentence.
FTX co-founder Zixiao “Gary” Wang also pled guilty and is cooperating with the prosecutors, the US attorney for SDNY announced in a short video statement. Additionally, the plea deal includes language that would allow Ellison to be released immediately on a $250,000 bail.
It is understood that the sentence to be imposed upon the defendant is within the sole discretion of the Court. This Office cannot, and does not, make any promise of representation as to what sentence the defendant will receive and will not recommend any specific sentence to the Court.
the plea stated.
Of the seven counts of allegations that Carolin Ellison faced, two accused her of committing, and conspiring to commit, wire fraud on FTX customers. Another two accused her of doing the same with Alameda Research customers.
Count five charged Ellison with conspiracy to commit commodities fraud. The sixth count alleged the former Alameda CEO conspired to commit securities fraud on FTX’s equity investors. Lastly, the prosecutors accused Ellison of conspiracy to commit money laundering.
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However, the plea agreement does not safeguard Sam Bankman-Fried’s girlfriend against prosecution from charges brought forth by other agencies. Additionally, authorities have prohibited Ellison from leaving the US.
SEC Files Separate Charges Against Caroline Ellison
Meanwhile, the Securities and Exchange Commission filed civil suits against Caroline Ellison and Gary Wang “for their roles in a multiyear scheme to defraud equity investors in FTX.”
The SEC alleged that Ellison manipulated FTT prices by purchasing large quantities on the open market, operating under directions from Bankman-Fried. Moreover, the complaint alleges that Sam Bankman-Fried raised billions of dollars by falsely claiming FTX to be a safe crypto trading platform.
As alleged, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang were active participants in a scheme to conceal material information from FTX investors, including through the efforts of Mr. Bankman-Fried and Ms. Ellison to artificially prop up the value of FTT
SEC’s complaint said
The SEC’s complaint alleged Ellison and Wang violated the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.
The financial watchdog would seek injunctions against Caroline Ellison and Gary Wang that would prohibit them “from participating in the issuance, purchase, offer, or sale of any securities, except for their own personal accounts.”
