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Caroline Ellison Hires Former Top SEC Crypto Regulator as Counsel in FTX Investigation

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  • Caroline Ellison has hired Stephanie Avakian and the law firm WilmerHale to represent her in the FTX investigation, per Bloomberg.
  • Avakian was a top regulator at the SEC, where she stepped up oversight of cryptocurrency.
  • She has also led major cases against companies such as Tesla, Theranos, Facebook and Wells Fargo, among others.

Ex-Alameda Research CEO Caroline Ellison has retained a former top cryptocurrency regulator for the U.S. Securities and Exchange Commission as the federal probe into the fall of FTX continues.

Bloomberg first reported that Ellison had hired Stephanie Avakian, chair of the securities and financial services department at law firm WilmerHale and former SEC chief enforcement officer. Sources familiar with the matter told Bloomberg that Avakian, along with other WilmerHale attorneys, will represent Ellison.

During his tenure at the SEC from 2016 to 2022, Akavian led a team that worked on several high-profile cases against major corporations and notable individuals. They include Elizabeth Holmes for making fraudulent claims to investors to raise $700 million for Theranos, Elon Musk for tweeting misleading claims about a Tesla privatization plan, and Facebook for misleading investors about the risks of misuse of user data.

Akavian has also been instrumental in increasing cryptocurrency regulation at the SEC, taking cases against companies like Robinhood and Ripple Lab.

Avakian and WilmerHale will represent Ellison in the federal investigation into his former company, Alameda Research, the trading company and sister company to fallen cryptocurrency exchange, FTX.

Prior to FTX’s November filing for bankruptcy, Alameda borrowed $3.3 billion in funds from the cryptocurrency exchange and loaned them to FTX founder Sam Bankman-Fried and companies he controlled to cover losses and make risky bets, according to court documents.

Ellison remained an elusive figure in FTX’s collapse, remaining mom and largely unreachable during its downfall. As Bloomberg noted, while Bankman-Fried has publicly blamed Alameda in numerous interviews, Ellison has remained silent.

The Senate Banking Committee said earlier this week that if Bankman-Fried did not appear before lawmakers next week to testify, he would be subpoenaed.

“As founder and CEO of FTX Trading Ltd. at the time of its collapse and founder, principal owner and former CEO of Alameda Research, you must answer for the failure of both entities which was caused, at least in part, by grossly misusing client funds and wiping out billions of dollars owed to more than a million creditors,” Senate Speaker Sherrod Brow said in a public statement to the former billionaire on Tuesday.

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