Caroline Ellison, 28, math genius to face more than 100 years in prison for fraud

Caroline Ellison, 28, was the director of Alameda Research, a trading firm affiliated with cryptocurrency exchange FTX, a Bahamas-based cryptocurrency exchange that filed for bankruptcy last November following separate fraud allegations. Ellison pleaded guilty to fraud charges and could face up to 100 years in prison.

Ellison is the eldest of three daughters of a pair of economics professors at the Massachusetts Institute of Technology (MIT). A natural mathematician since childhood, at the age of eight he gave his father an economic study of the prices of “R” Us toys as a birthday present.

The young woman was part of the school math team led by her father. and received top honors in many American math competitions.

He graduated from the university in 2012 with the Ron Barndt Award, a National Merit Scholarship, in mathematics.

He graduated from prestigious Stanford University in 2016 with a bachelor’s degree in mathematics., During his education, he was among the top 500 students in the 2013, 2014 and 2015 Putnam competitions..

Last year, in 2022, the young woman was on the magazine’s «30 Under 30» list. forbes.

FTX, Sam Bankman-Fried and Caroline Ellison

Last November, surprisingly, Bahamas-based company FTX went from being the third-largest exchange site in a week. bitcoins and a company that declared the world’s largest cryptocurrency bankrupt.

Sam Bankman-Fried, also the son of prestigious Stanford University professors and a young man with a physics graduate from MIT, founded Alameda Research in 2017. It was the company that became the investment branch of FTX, meaning cryptocurrencies became other assets.

Sam Bankman-Fried is charged with eight counts in the United States: money laundering, electronic fraud, securities fraud, and campaign finance violations.

According to the statement made by Sanjay Wadhwa and published in the magazine forbesThe assistant director of compliance for the United States Stock Exchange assured that both Bankman-Fried and Ellison were withholding information from investors.

“They were actively involved in a scheme to withhold material information from FTX investors, including Mr Bankman-Fried and Ms. Ellison’s efforts to artificially increase the value of FTT. It served as collateral for undisclosed loans received from FTX pursuant to Alameda’s nearly unlimited undisclosed loan facility.

In addition, Wadhwa assures that both of them, along with the vice principal of FTX, are hiding the real risks faced by cryptocurrency investors: «By secretly diverting funds from FTX clients into Alameda’s ledgers, the defendants are dealing with the very real problems FTX is facing. They hid their risks, investors and customers.”

According to the US press, the young woman would admit in court that she and Bankman-Fried had kept the information from investors. It’s about the money exchange between Alameda Research and FTX.

Bankman-Fried, who paid $250 million bail after being extradited to the United States from the Bahamas, is under house arrest in his family’s home.

Ellison is currently serving more than 100 years in prison, but can also be prosecuted only for criminal tax violations and released after paying $250,000 bail under a disclosure agreement with the Prosecutor’s Office.

extremes

But beyond the corporate network that made him want it by Uncle Sam, investigators were stunned by the businessman’s gradual takeover of the best properties in the Bahamas. «They bought the Bahamas in a great way,» a source told the Daily Mail for a report on the matter.

The newspaper shows luxuries bought with the money of hundreds of innocent people who gave up their savings to invest in cryptocurrencies. One of them is a penthouse worth $30 million, a large piece of land around the island where dozens of apartments and the company’s headquarters in Nassau are planned to be built.

The loft, for example, was featured in a Reuters article. In Albany Bahamas, a resort where Tiger Woods holds a tournament each year. It has six rooms and was shared by nine company employees.

The property has two private lifts, terrace, bar, jacuzzi and spa. According to the Daily Mail, the company has purchased six condominiums in the same location. Justin Timberlake also has a house there.

bail

A New York judge on Thursday ordered the release of FTX co-founder Sam Bankman-Fried on $250 million bail while awaiting trial for fraud in the cryptocurrency exchange crash. Judge Gabriel Gorenstein delivered his verdict at the Manhattan federal court hearing following Bankman-Fried’s extradition from the Bahamas.

The judge ruled that Bankman-Fried, who recently claimed she only had $100,000 left in the bank, would have to live in her family’s home in Palo Alto, California. Under the deal, 30-year-old former billionaire Warren Buffett, once touted as a possible future, will be subject to electronic monitoring.

FTX and its sister trading house Alameda Research went bankrupt last month, liquidating a virtual trading business that was at one point worth $32 billion by the market. Prosecutors allege that Bankman-Fried misled investors and misused funds belonging to FTX and Alameda Research clients. The businessman was charged with eight crimes, including conspiracy, electronic fraud, money laundering and violation of election finance law.

partners

Bankman-Fried was taken to New York by US law enforcement late Wednesday, where prosecutors said two of his aides pleaded guilty to the company’s bankruptcy.

They may both be collaborating with the government, which means they can blame Sam Bankman-Fried.

Caroline Ellison, former head of Alameda Research; Manhattan U.S. Attorney General Damian Williams said that FTX co-founder Gary Wang was charged «in connection with his roles in the fraud that contributed to the crash» of the platform.

According to The Wall Street Journal, both were charged with fraud, while only Ellison was charged with conspiracy.

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Separately, the US stock market regulator the SEC and the Commodity Futures Trading Commission (CFTC) announced Wednesday that they are filing a civil lawsuit against Ellison and Wang that the two cooperated, which would result in lighter penalties.

The CFTC estimates that $8 billion in funds was embezzled from FTX client accounts.

After being founded in 2019, FTX has seen phenomenal growth to become the leading player in the world of cryptocurrencies.

Bankman-Fried graced the covers of finance and technology magazines, and Fortune likened him to Buffett. and attracted large investments from leading fund managers and venture capitalists.

But everything collapsed dramatically in November when a media report said Alameda’s balance sheet was largely based on a token created by FTX with no standalone value, and revealed that the Bankman-Fried companies were interconnected.

The businessman was arrested at his apartment in Nassau on December 12 at the request of the United States.

permanent residence of the Bahamas, He spent nine days in jail, weighing his options, before saying on Wednesday that he would not oppose extradition to the Nassau court.

*with information from AFP