Alameda Analysis ex-CEO hires SEC’s former prime crypto cop in FTX probe

Ex-Alameda Analysis CEO Caroline Ellison has employed a former SEC official who oversaw lots of the regulator’s greatest crypto circumstances as her lawyer within the federal probe into cryptocurrency alternate FTX’s calamitous collapse. 

Stephanie Avakian, former enforcement division chief on the Securities and Trade Fee, is representing Ellison together with different attorneys at her agency, WilmerHale, in accordance with individuals conversant in the matter.  

A spokesperson for the legislation agency declined to remark. 

Alameda was the Hong Kong-based sister buying and selling firm of FTX, and FTX’s chapter workforce, Congress, regulators and Manhattan prosecutors are probing allegations billions of {dollars} in buyer funds deposited on the alternate wound up traded by Alameda.

Sam Bankman-Fried, FTX’s founder and former chief govt officer, has forged blame on Alameda in a number of media interviews. In distinction, Ellison has up to now remained silent, fueling hypothesis that she could also be looking for a cooperation take care of authorities. 

Avakian was SEC enforcement director for 4 years — and deputy director for 2 — earlier than she joined WilmerHale in 2020. She shared the function of director with Steve Peikin, who’s now representing FTX in its chapter proceedings. Throughout their tenure, the regulator ramped up enforcement within the cryptocurrency sector. 

Among the many circumstances Avakian oversaw was one in opposition to blockchain firm Ripple Labs, whose founders have been accused of illegally elevating $1.3 billion in an providing of an unregistered digital asset securities. The 2020 SEC go well with has sparked an ongoing debate over whether or not crypto property are securities.

Outdoors the crypto area, Avakian additionally oversaw enforcement actions in opposition to Robinhood Markets, General Electric and Tesla Inc chief govt officer Elon Musk.

WilmerHale associate Anjan Sahni, a former federal prosecutor who was within the working to be President Joe Biden’s US lawyer for the Southern District of New York earlier than Damian Williams was chosen for the function final yr, can be engaged on Ellison’s case, individuals with information of the matter mentioned. 

The Southern District is main the prison investigation into FTX. Sahni beforehand labored within the workplace for a decade and oversaw the investigation into Bernie Madoff’s accomplices and facilitators, in addition to dozens of insider buying and selling probes. He led the Southern District’s securities-fraud unit earlier than he left in 2015. 

Sahni and Avakian have each visited the Southern District prosecutors’ workplace in Decrease Manhattan previously week, but it surely’s unclear whether or not their visits have been associated to Ellison. 

There was rife hypothesis surrounding her whereabouts since an unconfirmed picture of the 28-year-old at a Soho cafe surfaced on Twitter on Dec. 4.

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