FTX: Love, Glory, Betrayal and a Century in Prison

Sent 23 Dec. 2022 at 10:00 a.mUpdated 23 Dec. 2022 at 11:44 am

The beautiful unit of FTX’s dream team was quickly shattered as it risked spending a century behind bars. The big unpacking has begun, and it’s now every man’s rule for himself. Caroline Ellison, 28, does not want to suffer the same fate as her former partner, Sam Bankman-Fried, who faces 115 years in prison if convicted of the eight charges against him. She pleaded guilty to the same offenses as him except one, violating campaign finance rules. They could cost him 110 years in prison. Therefore, on 19 December, she signed a cooperation agreement with the Ministry of Justice. If Caroline Ellison gives full satisfaction to the authorities (documents, cooperation, etc.), only tax evasion in connection with the financial aspect of the case will be charged against her.

She would only face a few years in prison, but this agreement with the court still needs to be approved by a court, which will also determine the amount of the amount she must repay. This agreement does not cover legal proceedings by other government agencies such as the Securities and Exchange Commission (SEC). On Wednesday, it had charged Caroline Ellison, the former head of FTX’s trading platform Alameda Research, and Gary Wang (FTX’s chief technology officer) with fraud and manipulation. In particular, the police officer of the US markets accused them of artificially increasing the price of FTX’s crypto, FTT. It was this crypto that was pledged as collateral to obtain loans. Thanks to this artificial financial guarantee, Alameda was able to borrow more money from more companies to speculate or compensate for its losses. For example, it lost $1 billion in 2021 on an obscure crypto, MobileCoin, according to the “Financial Times”.

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