Three former executives from FTX and its affiliates have received final penalties from the U.S. Securities and Exchange Commission as it closes enforcement actions linked to the exchange’s downfall, according to an SEC litigation notice issued on Friday.
As ex-CEO Sam Bankman-Fried serves his federal prison sentence for fraud convictions, Caroline Ellison, former CEO of Alameda Research, is among those who have agreed to consent judgments to settle enforcement actions filed in 2022 and 2023, pending court approval. Others involved in the agreements include Zixiao “Gary” Wang, former CTO of FTX Trading, and Nishad Singh, former co-lead engineer at FTX.
All of them will be prohibited from holding officer or director roles in other companies, with Ellison facing a 10-year restriction and the others receiving eight-year bans. They will also be subject to five-year “conduct-based injunctions,” as stated by the agency.
The SEC’s statement noted, “Bankman-Fried, Wang, and Singh, with Ellison’s knowledge and consent, had exempted Alameda from the risk mitigation measures and provided Alameda with a virtually unlimited ‘line of credit’ funded by FTX’s customers.” According to the complaints, Wang and Singh created the FTX software code that enabled the diversion of customer funds to Alameda, while Ellison utilized misappropriated FTX customer funds for Alameda’s trading operations.
Ellison was sentenced to two years in prison for her involvement in the FTX fraud but has reportedly been released early from prison. Wang, a key cooperating witness in the government’s case, and Singh both avoided jail time.
