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The former CEO of Alameda and the former CTO of FTX have both been charged with fraud by the US SEC
The regulator said Alameda had misled important investors about the pricing of FTT
The former CEO of Alameda Research, Caroline Ellison, and the former Chief Technology Officer of FTX, Zixiao Wang, have been accused by the US Securities and Exchange Commission (SEC) for their participation in a multiyear plan to defraud equity investors in the defunct FTX cryptocurrency exchange.
In a news statement dated December 21, the regulatory body issued the official announcement, emphasizing that investigations into further suspected violations of securities laws as well as other parties and individuals connected to the alleged misbehavior were still ongoing. The previous CEO Sam Bankman-Fried allegedly directed Ellison to manipulate the price of the FTX-issued token, FTT, which led to an inflated valuation of Alameda's FTT holdings and misled investors about FTX's risk exposure.
The regulator further claimed that Bankman-Fried misrepresented FTX as a secure platform for exchanging crypto assets with advanced risk mitigation tools to safeguard client funds while unlawfully diverting FTX consumer assets to Alameda.
Deputy Director of the SEC's Division of Enforcement Sanjay Wadhwa stated “Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang were key players in a plot to hide crucial information from FTX investors, including through Mr. Bankman-Fried and Ms. Ellison's attempts to artificially boost the value of FTT.”
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