(Jacob Bruns, Headline USA) Leftist political donor and former FTX CEO Sam Bankman–Fried has been betrayed by his girlfriend as a part of a plea deal, ZeroHedge reported.
Former Alameda CEO Caroline Ellison, who reportedly maintained an open relationship with Bankman–Fried prior to the FTX downfall, has agreed to cooperate with prosecutors so that she can get out of jail time.
Per the report, she will get off for all major charges, which would have totaled over 110 years in prison for conspiring and committing wire fraud and money-laundering.
Ellison—the daughter of Massachusetts Institute of Techology economists Glenn and Sara Fisher Ellison, and a family friend of current Securities and Exchange Commission chair Gary Gensler—pleaded guilty on all counts.
However, the charges will be dropped in exchange for her cooperation in getting a much bigger fish: Bankman–Fried, of whom she presumably knows a great deal.
Alameda Capital, Bankman–Fried’s hedge fund, was the basis for the FTX scam.
As separate but related charges, the SEC and the Commodity Futures Trading Commission filed civil lawsuits against Ellison and her colleague, Gary Wang.
We just discovered Caroline Ellison and Gary Wang turned on @SBF_FTX, rattling him out to the Feds. The SEC’s civil (non-criminal) complaint is built on their participation and gives us our first “insider’s account” of the FTX disaster.
I’ve given you 12 key takeaways below:👇🧵 pic.twitter.com/VNL2t09S5Q
— Compound248 (@compound248) December 22, 2022
“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,” said Gensler.
Ellison allegedly “used FTX’s customer assets to pay Alameda’s debts” using billions of their investors’ dollars to fill a massive gap left by a cryptocurrency market crash earlier this year.
Per the CFTC, Wang and Ellison created the algorithms used by FTX and Alameda to “maintain an essentially unlimited line of credit” on the exchange, thereby allowing it to have an “unfair advantage” over other companies.
The code essentially allowed Bankman–Fried to skim assets off the top without customers noticing.
“These critical code features and structural exceptions allowed Alameda to secretly and recklessly siphon FTX customer assets from the FTX platform.”
