The U.S. Commodity Futures Trading Commission (CFTC) has resolved its civil enforcement cases against Caroline Ellison, the former CEO of Alameda Research, and Gary Wang, the co-founder of FTX. A court imposed multi-year trading and registration bans after taking into account the cooperation both individuals provided in investigations tied to the collapse of FTX. The orders close out the regulator's share of the legal fallout from FTX's November 2022 failure, which sent the exchange and roughly 130 affiliated companies into Chapter 11 bankruptcy and drew parallel actions from the U.S. Department of Justice and the Securities and Exchange Commission.

The U.S. District Court for the Southern District of New York entered supplemental consent orders on Aug. 19. Under the new orders, Ellison received a five-year trading ban and a 10-year registration ban, while Wang received a five-year trading ban and an eight-year registration ban. Bans of this kind restrict dealing on CFTC-regulated derivatives markets and bar individuals from acting in capacities that require registration with the agency, such as serving as principals of registered firms.

Source: CFTC

Why the CFTC Did Not Seek Monetary Penalties

The bans run from Dec. 23, 2022, the date on which the court entered the initial consent orders. Both defendants must also continue cooperating with the CFTC in its investigation and related proceedings.

Under the 2022 orders, Ellison was found guilty of both counts of fraud brought in the regulatory complaint, while Wang was found guilty of the single count of fraud brought against him. Both parties have been permanently prohibited from violating the antifraud provisions of federal commodities law.

The supplemental orders conclude the CFTC's enforcement actions against Ellison and Wang. At the moment, the agency is not demanding any restitution, disgorgement, or civil monetary penalties from either party.

According to the CFTC, the decision was based, among other things, on the extent of the defendants' cooperation. The agency also took into consideration the financial impact of the related federal criminal proceedings. CFTC Enforcement Director David I. Miller said that the imposed sanctions reflected the significant contribution made by both individuals, calling it a clear indication of the importance attached to cooperation in the division. The outcome is consistent with the agency's published enforcement guidance, which treats substantial cooperation as a factor that can reduce sanctions in civil actions.

Both Ellison and Wang pleaded guilty to federal criminal charges in December 2022. They admitted to charges connected with schemes that involved defrauding FTX customers and investors, and both admitted to conspiracy to commit commodities fraud. According to the CFTC, the criminal proceedings included an $11.02 billion forfeiture order, and Ellison and Wang were held jointly and severally liable for the amount. Both later served as government witnesses at the 2023 criminal trial of FTX co-founder Sam Bankman-Fried, who was convicted of fraud and conspiracy charges and sentenced in March 2024 to 25 years in prison.

The FTX Fraud Case Involved Billions in Customer Funds

Ellison and Wang were first charged by the agency through an amended complaint filed in December 2022, which accused them of participating in the broader scheme. According to the complaint, FTX customer funds were regularly stored by Alameda and blended into the trading firm's own funds. The regulator further claims that billions of dollars in customer funds were misused by Alameda and its executives.

Source: Reuters

The complaint also accused Wang of helping to develop code features on FTX that gave preferential treatment to Alameda. Among these features were a virtually unlimited line of credit and the ability to carry out transactions despite not having enough funds. In addition, the regulator accused Ellison of ordering Alameda to misuse billions of dollars belonging to FTX — including customer funds — which were used for trading and digital asset investments.

Settlement Closes the CFTC's Cases Against Ellison and Wang

The supplemental orders settle the civil suits the regulator brought against the two former executives. The cooperation conditions will continue to apply, and the trading and registration bans will remain in place for the time periods fixed by the court.

The decision does not undo the previous fraud allegations against the two executives. Instead, it sets the final civil penalties in light of their assistance and the forfeitures made in the criminal case. According to the CFTC, both executives cooperated in its investigation in connection with FTX, and their case therefore concludes without any monetary penalties imposed by the commodities regulator. Customer recoveries, meanwhile, are being handled separately through FTX's bankruptcy estate, which began distributing funds to creditors in 2025.