Media cycle continues as two top FTX execs plead to fraud charges [71]

Alameda CEO Caroline Ellison and FTX co-founder Gary Wang cooperate with federal investigation

Good afternoon, friends!

The court proceedings and investigation into the collapse of FTX have continued over the past week even as Sam Bankman-Fried arrived back in the United States after being placed in FBI custody.

The latest news is that Caroline Ellison, former CEO of Alameda Research, and Gary Wang, the co-founder of FTX, have both pleaded guilty to fraud charges related to the collapse and bankruptcy of FTX. They have also both agreed to disclose information regarding information and matters related to what happened to the U.S. attorney and the FBI.

Separately, the Securities Exchange Commission and the Commodity Futures Trading Commission also filed civil fraud charges against both Ellison and Wang, founded on the fraud charges filed against SBF filed in the previous week.

All of this happened after SBF was extradited to the US and stood before a judge who granted him $250 million in bond for charges that he faced in the Southern District of New York.

The bond was put up in the form of a “personal recognizance” bond, meaning that no cash was needed to exchange hands for his freedom. Instead, his parents put up their Palo Alto home as collateral – which is rumored to be worth approximately $4 million. It is also believed that he will be staying there under house arrest while awaiting trial.

What’s next for SBF? Well, as you can be certain, he’s probably in for some jail time and his trial is not going to be pretty. Especially with these two turning to the government and giving testimony against him.

To embroil matters even further, the Department of Justice is now looking into the nearly $400 million that was drained from FTX in an alleged hack on the eve of the company declaring bankruptcy on Nov. 11, according to a report from Bloomberg.

The cryptocurrency suddenly exited FTX’s coffers late Nov. 11 and early Nov. 12 and suggested the activity of an insider. It was confirmed by the newly appointed FTX CEO John Ray III through a statement and a pinned statement in the company’s Telegram support channel warning that: “FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don’t go on FTX site as it might download Trojans.”

This investigation is separate from the fraud cases against SBF and unrelated to other proceedings. The report also noted that authorities did succeed in freezing some of the stolen funds.

As everyone can see the whole story is still unfolding and there’s still a lot more to reveal. It has certainly kept the attention of the entire crypto community given the high profile of FTX and Bankman-Fried. As usual, keep tuned for the news in the bulleted section below and the full rundown in the paid. See you next week!

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Blockchain Bulletin

• Kraken launches NFT marketplace beta to the public. Crypto exchange Kraken has launched its creator-friendly NFT marketplace beta to the public after a months-long private beta with a waiting list that includes gas-free internal trades and creator royalties, reported NFTGators.

• Bitcoin miner Core Scientific files for bankruptcy. Core Scientific, one of the largest bitcoin mining operators by hashpower, has filed for bankruptcy protection in Texas after coming to an agreement with some of its lenders to restructure its debt amid volatile markets, reported CoinDesk.

Blockchain Behind the Scenes

• FTX saga continues as Alameda CEO Caroline Ellison and FTX co-founder Andrew Wang plead guilty to fraud charges. It’s not Christmas for everyone as Alameda CEO Caroline Ellison and FTX co-founder Andrew Wang plead guilty to fraud charges in the Southern District of New York, and agree to assist in the federal investigation into the implosion of Sam Bankman-Fried’s crypto exchange FTX.