Last year, leaked documents revealed serious issues in FTX’s financial statements. The public disclosure of these documents resulted in a rush for withdrawals from FTX, but the company was unable to handle the high activity.
In November, FTX filed for Chapter 11 bankruptcy in the United States, and Bankman-Fried stepped down as CEO. A month later, he was charged with electronic fraud, securities fraud, money laundering, and conspiracy, but pleaded not guilty. If convicted of all charges, Bankman-Fried could face over 100 years in prison.
In addition to Wang, Bankman-Fried’s high school friend, Nishad Singh and Caroline Ellison, two other top executives of the conglomerate, have also pleaded guilty and are cooperating with prosecutors.
Wang and Singh admitted to creating a “secret backdoor” that allowed Alameda to access FTX’s clients’ funds.
“We gave special privileges to Alameda Research on FTX,” said Wang. “And we lied about it to the public.”