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Topics: US News, Cryptocurrency, Money, News
Anish Vij
Topics: US News, Cryptocurrency, Money, News
Caroline Ellison has broken silence about allegedly taking part in 'one of the biggest financial frauds in US history'.
The co-founder of the second largest crypto exchange in the world was charged with 'roles in the frauds that contributed to FTX's collapse'.
FTX declared bankruptcy on 11 November and is now owing its 50 largest creditors almost $3.1bn (£2.5bn), according to court filings.
Former boss Bankman-Fried was extradited on suspicion of committing fraud and has denied all allegations after he was arrested in the Bahamas earlier this month.
He faces an eight-count indictment that carries a maximum 115 years in prison.
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Caroline Ellison was the CEO of Alameda Research, another company that was part of Bankman-Fried's collapsing crypto empire, which also filed for Chapter 11 bankruptcy.
According to a publicly released transcript, the 28-year-old said: "I am truly sorry for what I did.
"I knew that it was wrong."
In Manhattan federal court, Ellison admitted that she 'understood that many FTX customers invested in crypto derivatives and that most FTX customers did not expect that FTX would lend out their digital asset holdings and fiat currency deposits to Alameda in this fashion'.
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Ellison now faces up to 110 years in prison after agreeing a plea deal with prosecutors, having faced seven charges including wire fraud, conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering.
The combined maximum sentences for these charges is 110 years.
The plea deal document, dated 18 December, says Ellison will plead guilty to the seven charges laid against her and will also have to pay restitution, with the amount she will pay yet to be determined by a court.
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In exchange, she will not be prosecuted on any counts of possible criminal tax violation, and she will be expected to fully comply with all investigations both by the prosecution and other law enforcement agencies.
Damian Williams, the US Attorney for the Southern District of New York, previously said: "All this dirty money was used in service of Bankman-Fried's desire to buy bipartisan influence and impact the direction of public policy in Washington."
Earlier this month, Bankman-Fried told BBC News: "I didn't knowingly commit fraud.
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"I don't think I committed fraud.
"I didn't want any of this to happen.
"I was certainly not nearly as competent as I thought I was."