{"id":15761,"date":"2022-12-22T22:55:43","date_gmt":"2022-12-22T22:55:43","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/sec-charges-against-ftx-alameda-execs-wang-and-ellison-reveal-key-findings-us-regulator-says-ftt-is-a-security-bitcoin-news\/"},"modified":"2022-12-22T22:55:43","modified_gmt":"2022-12-22T22:55:43","slug":"sec-charges-against-ftx-alameda-execs-wang-and-ellison-reveal-key-findings-us-regulator-says-ftt-is-a-security-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/sec-charges-against-ftx-alameda-execs-wang-and-ellison-reveal-key-findings-us-regulator-says-ftt-is-a-security-bitcoin-news\/","title":{"rendered":"SEC Charges Against FTX, Alameda Execs Wang and Ellison Reveal Key Findings, US Regulator Says FTT Is a Security \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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On Dec. 21, 2022, members of U.S. law enforcement detailed that FTX co-founder Gary Wang and ex-Alameda Research CEO have pleaded guilty to financial fraud charges. The recent charges against Wang and Ellison highlight some key findings and according to the U.S. Securities and Exchange Commission (SEC), FTX\u2019s exchange token FTT is considered a security. <\/strong><\/p>\n

SEC Complaint Says SBF \u2018Directed\u2019 and \u2018Instructed\u2019 High-up Execs Like Caroline Ellison to Commit Fraud<\/h2>\n

U.S. attorney Damian Williams told the public on Wednesday that charges have been filed against Caroline Ellison, the former CEO of Alameda Research, and Zixiao (Gary) Wang, the former Chief Technology Officer of FTX Trading Ltd. The Southern District of New York (SDNY) also told the press that Ellison and Wang were cooperating with federal law enforcement and the recent SEC charges identify key findings that were previously speculated on or were unknown at the time.<\/p>\n

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FTX co-founder and ex-CTO Zixiao (Gary) Wang (pictured left). Ex-Alameda CEO Caroline Ellison (pictured right).<\/figcaption><\/figure>\n

The first glaring evidence shows that the FTX co-founder Sam Bankman-Fried (SBF) said a lot of untruthful things during his recent media tour. The SEC charges show that lied during those interviews about specifics and the SEC accuses Bankman-Fried and Wang of \u201cimproperly [diverting] customer assets to Alameda Research LLC and its subsidiaries.\u201d Moreover, the speculation and rumors that said SBF and Wang built a backdoor into FTX for Alameda are also reportedly true, according to the SEC\u2019s accusations.<\/p>\n

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Sam Bankman-Fried\u2019s mother Barbara Fried entering the court in New York for her son\u2019s arraignment on Dec. 22.<\/figcaption><\/figure>\n

The SEC complaint<\/a> says SBF, Wang, and Ellison \u201chad provided Alameda with significant special treatment on the FTX platform, including a virtually unlimited \u2018line of credit\u2019 funded by the platform\u2019s customers.\u201d The U.S. regulator further says that Ellison, \u201cacting at the direction of Bankman-Fried,\u201d manipulated the FTX exchange token FTT\u2019s price. The move was meant to increase the price of FTT in order to \u201cinflate the value of Alameda\u2019s collateral.\u201d<\/p>\n

The SEC also alleges that SBF was the sole decision maker at Alameda Research. \u201cBankman-Fried remained the ultimate decision-maker at Alameda, even after Ellison and Trabucco became co-CEOs in or around October 2021,\u201d the SEC\u2019s court filing details. The SEC\u2019s accusations further state:<\/p>\n

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Most crucially, Bankman-Fried used Alameda to house FTX customer assets and to deploy those assets, under Bankman-Fried\u2019s direction, to help grow his empire.<\/p>\n<\/blockquote>\n

U.S. Regulator Defines FTT as a Security, SBF\u2019s $250M Bail Bond Deal in Manhattan\u2019s Federal Court<\/h2>\n

One of the most glaring charges, that may produce broad regulatory measures across the entire crypto industry, is how the SEC defines the crypto token FTT. Essentially, in the eyes of the U.S. securities regulator, FTT is a security. \u201cFTT was offered and sold as an investment contract and, therefore, as a security,\u201d the SEC complaint against Wang and Ellison details. \u201cAs a result of FTX and its management team\u2019s large holdings of FTT, the interests of the company and its management team were aligned with those of investors in FTT,\u201d the complaint adds.<\/p>\n

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Screenshot from the SEC complaint against Ellison and Wang.<\/figcaption><\/figure>\n

The charges against Ellison and Wang further said that the FTT white paper \u201cspecifically highlighted the profit potential of the token.\u201d On several occasions throughout the SEC filing, it notes that Ellison says SBF \u201cdirected\u201d or \u201cinstructed\u201d her to execute many of the misdeeds. The claimed direction Ellison describes completely contradicts SBF\u2019s claims when he said he was unaware of Alameda\u2019s dealings and that he did not operate the firm. The SEC\u2019s allegations note that for quite some time, Ellison was supposedly ordered to do a number of fraudulent acts under SBF\u2019s command.<\/p>\n

In 2022, despite being under significant distress the SEC alleges that \u201cBankman- Fried and Ellison continued to use FTX customer assets in the summer of 2022.\u201d Funds were leveraged to mislead investors and rescue distressed crypto firms, the SEC\u2019s complaint details. The New York Post reports<\/a> that SBF was extradited late Wednesday evening and he is now in New York\u2019s Manhattan district. SBF\u2019s mother \u201cBarbara Fried, was seen arriving at the Pearl Street courthouse hours before an expected noon arraignment,\u201d The Post said. The report further detailed that SBF faced a judge in Manhattan\u2019s federal court in order to be arraigned.<\/p>\n

SBF appeared in front of the Manhattan judge, Gabriel Gorenstein, who approved a $250 million bond deal that will allow the FTX co-founder to be placed under house arrest with his parents Joseph Bankman and Barbara Fried. SBF was represented by sex offender Ghislaine Maxwell\u2019s attorney, Mark Cohen, and sources told<\/a> the New York Post that the \u201cdeal was prearranged.\u201d Under the deal, SBF would be allowed out of his parent\u2019s home in California for exercise, mental health, and substance abuse treatments, according to The Post\u2019s account of the bond deal.<\/p>\n

Unsealed court documents indicate that Ellison\u2019s plea agreement, which must be approved by the court, shows the former ex-Alameda CEO agreed to $250,000 bail. Ellison also surrendered her passport, and she will need to pay restitution decided on by the court. If Ellison fully cooperates and the SDNY federal court agrees, she may only face criminal tax violations and there\u2019s a chance she could get off without any jail time. The unsealed plea agreement indicates that Ellison is working with the attorney Stephanie Avakian<\/a>. A plea agreement for Gary Wang\u2019s charges and his specific deal has not yet been revealed to the general public.<\/p>\n

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\nTags in this story
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Attorney Williams<\/a>, Bankman-Fried<\/a>, Barbara Fried<\/a>, Caroline Ellison<\/a>, CFTC<\/a>, Charges<\/a>, Cooperation<\/a>, FBI<\/a>, federal court<\/a>, Fraud Charges<\/a>, FTT<\/a>, FTT security<\/a>, ftx<\/a>, FTX collapse<\/a>, Gary Wang<\/a>, Law Enforcement<\/a>, new york<\/a>, NY<\/a>, Sam Bankman-Fried<\/a>, sbf<\/a>, SBF arraignment<\/a>, SDNY<\/a>, SEC<\/a>, SEC filing<\/a>, Securities<\/a>, Security<\/a>, security token<\/a>, unregistered security<\/a><\/div>\n<\/div>\n

What do you think about the key findings in the SEC charges against Ellison and Wang? Let us know what you think about this subject in the comments section below. <\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons, The New York Post, <\/em><\/p>\n

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