Gary Wang and Caroline Ellison, the co-founder and former CTO of cryptocurrency exchange FTX, and former CEO of Alameda Research, respectively, have pleaded guilty to charges related to their roles in a fraud scheme that contributed to the collapse of FTX, according to U.S. Attorney Damian Williams.
Ellison was charged with seven counts, including wire fraud, wire fraud conspiracy, conspiracy to commit commodities and securities fraud, and conspiracy to commit money laundering. Wang was charged with four counts of wire fraud, wire fraud conspiracy, and conspiracy to commit commodities and securities fraud. Both individuals have also been charged by the U.S. Securities and Exchange Commission (SEC) and have settled with the securities watchdog.
Both were instrumental players in FTX's fraud. Wang was the one to create a backdoor in FTX, allowing Alameda to withdraw its customers' funds without detection. Ellison then used those funds to make risky trades, all under the direction of the companies' ringleader Sam Bankman-Fried (SBF). Luckily, he was just extradited to the United States and placed in FBI custody. He had to pay over $250mn for his bail bond and the judge said that he'll later enter a plea for his fraud charges.
This is a developing story, and more information is expected to be released as the case progresses. It serves as a reminder of the importance of thoroughly vetting cryptocurrency exchanges and the individuals behind them before entrusting them with personal and financial information.
Election Administration Approves Use of NFTs for Fundraising
DataVault Holdings may use nonfungible tokens for fundraising activities, according to an advisory opinion from the Federal Election Commission (FEC) of the United States.
DataVault Holdings was "permitted" to distribute nonfungible tokens, or NFTs, to political campaign contributors in accordance with FEC guidelines on corporate contributions, according to a notice issued on December 15. The electoral agency states that DataVault will track all tokens issued for its own purposes and get "fair compensation" for each NFT distributed to contributors.nft
According to FEC Chair Allen Dickerson, "The Commission finds that DataVault's plans to issue political organizations NFTs on the same terms that it regularly offers its non-political clients would be a permitted extension of credit by DataVault in the ordinary course of business." According to the Act and Commission regulations, a commercially incorporated vendor may grant political groups credit on terms that are essentially the same as those that the vendor grants to non-political debtors. DataVault qualifies as a "commercial vendor" because it offers the same services to political groups as part of its regular and routine operation.
DataVault's legal team suggested in September that the company be permitted to deliver NFTs as keepsakes — "in a manner analogous to a campaign hat" — to anyone who donated to political parties. Additionally, the tokens would allow their owners to promote a cause "strictly on a voluntary basis and without any pay." According to DataVault, all expenses associated with the issuance of NFTs or transactions will be recorded as a "fundraising expenditure."
A similar advisory opinion on blockchain tokens was released by the FEC in 2019 and stated that some of them were "materially indistinguishable from traditional types of campaign souvenirs." In that instance, tokens given out by congressional candidate Omar Reyes had "no monetary value" and were intended to encourage volunteers to help with the campaign.