On the identical day that that the Bahamas extradited FTX co-founder and former CEO Sam Bankman-Fried to the U.S. to face felony charges, two former executives at FTX and Alameda Research pleaded guilty Wednesday to federal fraud charges.

Caroline Ellison, the previous chief govt of Alameda Research — the crypto buying and selling firm based by Bankman-Fried — and Zixiao (Gary) Wang, co-founder of crypto platform FTX and its former chief expertise officer, had been charged for his or her roles in contributing to the crypto platform’s collapse.

In a video Wednesday night time, U.S. Attorney Damian Williams of the Southern District of New York stated each had been cooperating within the investigation into FTX and Bankman-Fried.

Williams added that Bankman-Fried was in FBI custody and can seem in courtroom in “as soon as possible,” and prompt extra charges within the FTX case may very well be forthcoming.

“If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” Williams stated. “We are moving quickly and our patience is not eternal. … and we are far from done.”

In a parallel motion, the Securities and Exchange Commission on Wednesday additionally charged the pair “for their roles in a multiyear scheme to defraud equity investors in FTX.”

According to the SEC criticism, Ellison helped manipulate the worth of FTX-issued crypto token FTT, which served as collateral for undisclosed loans from FTX clients’ property to Alameda. In addition, the SEC alleges Bankman-Fried misled clients by falsely claiming FTX was a secure buying and selling platform with strict risk-mitigation measures.

The SEC claims Wang created software program code to permit Alameda to divert FTX clients’ funds, and that Ellison used these funds for Alameda’s buying and selling exercise.

“As part of their deception, we allege that Caroline Ellison and Sam Bankman-Fried schemed to manipulate the price of FTT, an exchange crypto security token that was integral to FTX, to prop up the value of their house of cards,” SEC Chair Gary Gensler stated in an announcement. “We further allege that Ms. Ellison and Mr. Wang played an active role in a scheme to misuse FTX customer assets to prop up Alameda and to post collateral for margin trading. When FTT and the rest of the house of cards collapsed, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left investors holding the bag. Until crypto platforms comply with time-tested securities laws, risks to investors will persist. It remains a priority of the SEC to use all of our available tools to bring the industry into compliance.”

Bankman-Fried was arrested within the Bahamas final week after he was indicted by U.S. federal prosecutors, who allege he performed a key function within the collapse of FTX, diverting billions of {dollars} of buyer property and defrauding traders, clients and lenders.

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