FEDERAL prosecutors on Wednesday (Dec 21) said they have charged Caroline Ellison, the former CEO of Alameda Research, and Zixiao (Gary) Wang, the former chief technology officer of FTX Trading (FTX) with defrauding investors in the crypto trading platform.

US attorney Damian Williams said in a video statement that both Wang and Ellison have pleaded guilty to the charges and have agreed to cooperate with prosecutors. He said that Sam Bankman-Fried, founder of FTX, is now in FBI custody and is on his way to the United States.

The US Securities and Exchange Commission (SEC) said in a separate statement that it has also charged Ellison and Gary Wang for their roles in a multiyear scheme to defraud equity investors of FTX.

Ellison and Wang were active participants in a scheme to deceive investors, the SEC said, alleging that Wang created FTX’s software code that allowed Alameda to divert FTX customer funds, and Ellison used misappropriated FTX customer funds for Alameda’s trading activity.

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

An attorney for Ellison did not respond immediately to request for comment.

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Williams also gave a stark warning in the video: “If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it. We are moving quickly and our patience is not eternal.” REUTERS