US SEC Charges Caroline Ellison & FTX CTO for Multiyear Fraud

Last Updated:
Ex-SEC Boss Jay Clayton Blocked Route to Bitcoin Spot ETF: Legal Expert
  • The US SEC has officially accused Alameda’s ex-CEO and FTX’s former CTO of fraud.
  • The regulator argued Alameda manipulated the price of FTT to decisive investors.
  • The former FTX boss arrived in New York today to face fraud charges.

The US Securities and Exchange Commission (SEC) has officially charged Caroline Ellison, the former CEO of Alameda Research, and Zixiao Wang, FTX’s former Chief Technology Officer, for their roles in a multiyear scheme to defraud equity investors in the bankrupt FTX crypto exchange.

The regulator made the official pronouncement in a press release dated December 21, noting that investigations into other securities law violations and other entities and persons relating to the alleged misconduct were ongoing.

According to the SEC’s complaint, Ellison manipulated the price of the FTX-issued token, FTT, at the direction of the former CEO Sam Bankman-Fried, causing an inflated valuation of Alameda’s FTT holdings, misleading investors about FTX’s risk exposure.

The regulator added that Bankman-Fried improperly diverted FTX customer assets to Alameda while falsely portraying FTX as a secure crypto asset trading platform with sophisticated risk mitigation measures to protect customer assets.

Sanjay Wadhwa, Deputy Director of the SEC’s Division of Enforcement said:

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 prop up the value of FTT artificially.

Notably, Bankman-Fried has arrived in New York from the Bahamas today to face fraud charges. According to US authorities, the 30-year-old was extradited on suspicion of conducting one of the worst financial scams in US history.

Furthermore, Bankman-Fried and his cohorts have continuously blamed the fall of FTX on the rival Binance crypto exchange.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.