Caroline Ellison and Zixiao “Gary” Wang, two executives in Sam Bankman-Fried’s fallen crypto empire, have pleaded guilty to federal charges and are cooperating with prosecutors. The news was announced late Wednesday by Damian Williams, U.S. Attorney for the Southern District of New York.

Williams did not specify the charges of the two, but said the guilty pleas related to their role as insiders at FTX and its sister company Alameda Research. Wang co-founded the cryptocurrency exchange FTX and owned 10 percent of Alameda Research. (Bankman-Fried owned the other 90 percent.) Ellison was CEO of Bankman-Fried’s trading company Alameda Research.

Ellison pleaded guilty to seven charges, according to The Washington Post. She faces up to 110 years in prison, WaPo say. Wang pleaded guilty to four charges and faces a prison sentence of up to 50 years.

According to the CFTC, at its peak, FTX was moving $20 billion in trades daily. Bankman-Fried and a select group of insiders, including Ellison and Wang, were said to be the only people who knew that FTX was committing fraud. The cases against Bankman-Fried are both criminal and civil and have been brought by the SDNY, the CFTC and the SEC. Reportedly, FTX client funds were used for executive loans, high-risk trading by Alameda Research, political donations, and lavish spending on everything from beachfront homes to private jet flights.

The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have already filed updated civil suits, including details of Wang and Ellison’s roles. “Wang, with the knowledge and consent of Ellison, has exempted Alameda from the risk mitigation measures,” FTX used, granting Alameda Research a “virtually unlimited ‘line of credit,'” according to the updated SEC filing.

The SEC complaint outlines how “Bankman-Fried and Wang gave Alameda and Ellison carte blanche to use FTX client assets for Alameda’s trading activities and for any other purposes Bankman-Fried and Ellison deemed appropriate.”

Ellison, acting on orders from Bankman-Fried, borrowed billions of dollars from lenders, according to the SEC lawsuit. Those loans were backed “in a significant portion” by the FTT token, which was issued by FTX and given to Alameda for free, the SEC wrote. Ellison’s job was to buy FTT tokens on various platforms to raise the price, making the FTT used as collateral for Alameda’s loans more valuable. That, in turn, made it possible for Alameda to borrow even more.

“As part of their deception, we allege that Caroline Ellison and Sam Bankman-Fried plotted to manipulate the price of FTT, an exchange crypto security token that was an integral part of FTX, to increase the value of their house of cards ,” SEC Chairman Gary Gensler said in a statement.

The fraud came to light after a blockbuster CoinDesk article reported that Alameda Research’s balance sheet consisted primarily of the FTT token, beginning a chain of events that ended in FTX’s bankruptcy. During that time, Binance CEO Changpeng Zhao said he would sell his FTT holdings; Ellison tweeted that Alameda would buy for $22 per token.

In an effort to prevent a collapse in the FTT token price, Ellison and Bankman-Fried began liquidating Alameda Research’s investments — freeing up funds for buybacks, according to the CFTC filing. It wasn’t enough. During that period, Bankman-Fried, Ellison, and a third, unnamed FTX executive expressed surprise that Bitcoin’s price had not fallen more.

As panicked FTX clients began withdrawing their money from the exchange, Ellison and Bankman-Fried Alameda instructed investigators to “generally do everything possible to quickly obtain billions of dollars in capital to send to FTX.” the CFTC indictment said. It wasn’t enough.

At a meeting on Nov. 9, Ellison told staff the truth about Alameda’s misappropriation of FTX funds from customers, the CFTC says.

In response to a question from staff: “Ellison also acknowledged that her Tweet dated Nov. 6 to Binance’s CEO offering to buy his FTT holdings for $22 per token was “a bit misleading to tweet” and expressed remorse, the CFTC’s complaint read. Most of the staff subsequently resigned.

In the bankruptcy filing, FTX’s new CEO, John J. Ray, said the company was worse than Enron — and he would know it, since he was accused of cleaning up after the fraud there.

In May, when the price of crypto started to fall, the lenders wanted their money back. To keep them happy, Bankman-Fried ordered customer deposits to be sent to the lenders. Ellison used that money to pay Alameda’s debts.

“Even in November 2022, when Bankman-Fried and Ellison, faced with multibillion-dollar customer withdrawal requirements that FTX could not meet, Bankman-Fried and Ellison, with Wang’s knowledge, misled investors from whom they needed money to build a multibillion dollar gap,” the SEC wrote in its suit.

But money had also been diverted from customers from the beginning, the SEC wrote in its lawsuit. This was echoed by the CFTC suit.

Alameda came into possession of FTX client funds in two ways: first through the “line of credit”, but also by directing clients to deposit fiat currency into accounts controlled by Alameda. “As a result, there was no meaningful distinction between FTX client funds and Alameda’s own funds,” the SEC lawsuit says. “So Bankman-Fried and Wang gave Alameda and Ellison carte blanche to use assets of FTX clients for Alameda’s trading activities and for any other purpose Bankman-Fried and Ellison deemed appropriate.

This use was not authorized by customers, as the CFTC suit makes clear. (It echoes the SEC lawsuit’s allegations about how customer funds were misused by Alameda.) Indeed, FTX’s terms of service explicitly forbid this sort of thing, the CFTC lawsuit says. So that means the executives were conscious that it was important to keep client assets safe and separate from other funds – important for establishing intent, which is critical to proving allegations of fraud.

That made Alameda Bankman-Fried’s “personal piggy bank to buy luxury condominiums, support political campaigns, and make private investments, among other things.”

Earlier on Wednesday, the Bahamas extradited Sam Bankman-Fried and sent him on his way back to the US. Williams confirmed that Bankman-Fried is now in FBI custody and said he would be transported straight to New York to face a judge “as soon as possible”.