CFTC reaches settlement with Ellison and Wang in FTX case

The U.S. federal court ruled against Caroline Ellison and Gary Wang: a five-year trading ban and a maximum ten-year registration ban

The U.S. federal court ruled on the Commodity Futures Trading Commission (CFTC)'s case against Caroline Ellison and Gary Wang, imposing a five-year trading ban on them and a maximum ten-year registration ban on them respectively.

Abstract

Ellison was sentenced to a five-year trading ban and a ten-year CFTC registration ban. Wang was sentenced to a five-year trading ban and an eight-year registration ban. The starting dates for both penalties are retroactive to the original consent order signed on December 23, 2022. The CFTC said it is not currently seeking additional financial penalties due to the cooperation of the two and a confiscation order of up to $11.02 billion.

Details of the ruling

On August 19, the U.S. Commodity Futures Trading Commission (CFTC) said that the U.S. District Court for the Southern District of New York had signed supplementary consent orders against Ellison (former CEO of Alameda Research) and Wang (co-founder of Alameda and FTX). Under the order, two former executives must continue to assist regulators. Ellison was not allowed to trade for five years and was not allowed to register with the CFTC for ten years; Wang was sentenced to a five-year trading ban and an eight-year registration ban.

These restrictions did not begin with the latest ruling. According to regulators, the various deadlines will start on December 23, 2022, when the court first signed an initial consent order against the two men. The previous consent order also permanently prohibited Ellison and Wang from violating the anti-fraud provisions of the Commodity Exchange Act and relevant CFTC rules. Combined with the supplemental consent order, the CFTC's enforcement action against the two former executives ended.

CFTC waives additional financial penalties

The CFTC currently does not pursue compensation, illegal gains or civil fines from Ellison and Wang. In explaining the decision, the agency pointed out that the two men had provided assistance in the investigation, cooperated in related proceedings, and that the parallel criminal case had had financial consequences on them. The two men pleaded guilty in December 2022 to multiple federal charges, including conspiracy to commit commodity fraud. According to the CFTC, its criminal case was also accompanied by a $11.02 billion confiscation order for which the two men were jointly and severally liable. The agency regards their cooperation as a core factor in setting civil penalties.

David I. Miller, Director of Enforcement at the CFTC, said: "Ellison and Wang are senior managers of Alameda and FTX who committed fraud and are responsible for their actions. However, their penalties reflect the substantive assistance they provided in the Commission's FTX-related investigations." Miller said the ruling showed the importance law enforcement agencies attached to "strong cooperation." Although the financial relief measure is different from the original requirements, the trading and registration ban will prevent the two from participating in CFTC regulated markets or registering with the CFTC for a specified period.

Ellison and Wang admit responsibility in 2022

The case began after the collapse of FTX in November 2022, when the CFTC expanded its fraud lawsuit against founder Sam Bankman-Fried and his company. In a revised indictment in December 2022, regulators accused Ellison and Wang of participating in a conspiracy that resulted in losses of more than $8 billion in FTX customer deposits. The CFTC accused Ellison of fraud and material misrepresentation in connection with digital asset commodities, while Wang faces fraud charges related to sales in interstate trade. Ellison was found responsible for both fraud charges in the revised indictment, while Wang was found responsible for his single charge.

Based on the CFTC's 2022 allegations, Wang helped write the code that gave Alameda a near-unlimited credit line on FTX. Other exception settings purportedly allow the trading company to execute orders faster and avoid the exchange's automated clearing process, even if Alameda does not have enough funds to support its positions. Regulators said the features allow Alameda to extract billions of dollars in customer assets and did not disclose the special treatment to FTX users. FTX has publicly stated that client funds are held by custodians and independent of company assets, but the indictment alleges that Alameda often received those assets and mixed them with its own funds. After becoming Alameda's sole CEO, Ellison allegedly directed the company to use FTX's billions of dollars to trade on other exchanges and invest in digital asset companies. The CFTC also accused her of making misleading public statements about the separation between FTX and Alameda.

Ellison and Wang did not object to liability under the Commodity Exchange Act and CFTC Section 180.1. Its consent order of December 23, 2022 formally confirmed these determinations, while leaving it to the court to determine the remaining penalties at a later date.

Criminal sentences have different attitudes towards cooperation

The issuance of the CFTC supplemental consent orders follows the respective criminal sentences, which also takes into account the extent of assistance each defendant has provided to U.S. prosecutors. Ellison pleaded guilty in December 2022 and was sentenced to two years in prison in September 2024 for serving as a key government witness in the Bankman-Fried trial. In November of that year, she reported to the Connecticut federal prison. Although prosecutors detailed Ellison's cooperation, U.S. District Judge Lewis Kaplan sentenced him to prison. According to reports in November 2024, the judge said in sentencing that her assistance did not eliminate the need to deter fraud.

Wang avoided an additional sentence. In November 2024, Kaplan sentenced him to serving a sentence and an additional three years of supervised release after prosecutors described him as assisting in tracing funds, interpreting FTX codes and internal financial systems. The court found Wang's cooperation particularly useful because he wrote part of the exchange's software and was able to explain the privileges granted to Alameda. In Bankman-Fried's criminal trial, Wang testified about codes that allowed the trading company to access client funds and operate without restrictions from ordinary users. As Wang's sentencing report stated, prosecutors said he was the first person on the Bankman-Fried senior team to come into contact with U.S. authorities in 2022. Ellison later became the core witness against Bankman-Fried, who was sentenced to 25 years in prison in March 2024.

FTX-related litigation continues into 2026

Legal claims related to FTX-related remain active outside of criminal cases against former executives. In May 2026, law firm Fenwick & West reportedly agreed to pay $54 million to settle a class action lawsuit filed by former FTX clients. The proposed settlement still requires court approval when announced. Clients accuse Fenwick of helping establish corporate and legal structures that allow FTX and Alameda to transfer and mix client funds without appropriate controls. According to documents cited in the report, the plaintiffs relied in part on testimony from Ellison, Wang and former FTX engineering director Nishad Singh about improper loans, misrepresentations and the handling of client funds.

Singh reached his own supplementary settlement with the CFTC in April 2026. He agreed to pay $3.7 million in illicit proceeds and accepted a five-year trading ban and an eight-year registration ban, and regulators also cited his cooperation with investigators.