A federal prosecutor announced on Wednesday, December 21, 2022 that Carolyn Ellison and Gary Wang; Sam Bankman-Fried’s top associates have secretly pleaded guilty to criminal charges in the collapse of the cryptocurrency exchange firm, FTX and are cooperating with investigators.

Carolyn Ellison, the 28-year-old former CEO of Alameda Research, a trading firm started by Bankman-Fried, and Gary Wang, the 29-year-old who co-founded FTX, pleaded guilty to charges including wire fraud, securities fraud and commodities fraud.

“They are both cooperating with the Southern District of New York,” U.S. Attorney Damian Williams remarked.

Williams added that anyone else who partook in the fraud should reach out to his office because “our patience is not eternal” and further criminal charges against others were possible.

The unexpected guilty pleas were announced as the Former FTX CEO, Sam Bankman-Fried was being extradited from the Bahamas by U.S. law enforcement to answer to charges tied to his role in FTX’s fiasco.

Bankman-Fried is expected to appear in a federal court in New York City on Thursday, December 22, 2022.

It was unclear whether Bankman-Fried, who has apologized for FTX’s collapse but denied defrauding anyone, was also in the dark about his colleagues’ deeds.

Ellison and Wang signed plea agreements on December 19, 2022 partly in exchange for a promise that prosecutors would recommend a reduction in their sentences if they cooperate fully in the investigation.

Without such a deal, Ellison, who also faces a money laundering conspiracy charge, could face up to 110 years in prison. Wang could get up to 50 years’ imprisonment.

Both were released on $250,000 bail after their secret court appearances with travel restricted to the continental United States.

“Gary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness,” said Wang’s lawyer, Ilan Graff.

A lawyer for Ellison did not immediately return messages seeking comment.

Wang And Ellison Were “Active Participants”

In a parallel civil complaint filed on Wednesday, December 21, 2022, the Securities and Exchange Commission(SEC) said that Wang and Ellison were “active participants” in what it said was Bankman-Fried’s scheme to defraud FTX investors and swindle its customers.

The SEC disclosed that Wang created the software code that permitted Alameda to divert FTX customer funds. Ellison then utilized the misappropriated funds for Alameda’s trading activity.

Last week, Bahamian authorities arrested Bankman-Fried at the request of the U.S. government. U.S. prosecutors allege that he played a central role in the rapid downfall of FTX and concealed its problems from the public and investors.

The SEC and prosecutors said Bankman-Fried illegally siphoned off customer deposits on the FTX platform and used it to enable Alameda’s trading, buy real estate and make huge campaign donations to U.S. politicians.

Bankman-Fried could potentially spend the rest of his life in jail. On Wednesday, Bahamian Attorney General Ryan Pinder disclosed that Bankman-Fried had agreed to be transferred to the U.S.