US CFTC Finalizes Action Against Two FTX Co-Founders: Ellison and Wang Both Banned from Trading for 5 Years, No Restitution or Civil Penalties Sought

The U.S. Commodity Futures Trading Commission (CFTC) recently disclosed that the U.S. District Court for the Southern District of New York has issued supplemental consent orders against former Alameda Research CEO Caroline Ellison and Alameda and FTX co-founder Gary Wang, formally resolving the CFTC's enforcement cases against the two individuals. Under the court orders, both Ellison and Wang are required to continue cooperating with CFTC investigations. Ellison was handed a 5-year trading ban and a 10-year registration ban, while Wang received a 5-year trading ban and an 8-year registration ban. The relevant ban periods are calculated from the effective date of the initial consent orders both signed on December 23, 2022. In 2022, the court found Ellison liable for two fraudulent conduct charges brought by the CFTC, and found Wang liable for one fraudulent conduct charge, permanently prohibiting both from violating the Commodity Exchange Act and related CFTC anti-fraud regulations. Notably, the CFTC is not currently seeking disgorgement, restitution of ill-gotten gains, or civil monetary penalties against Ellison and Wang. The CFTC's enforcement division stated that this decision is based in part on their substantial cooperation in the investigation and related litigation, including guilty pleas in federal criminal cases and assistance in investigating FTX-related matters. CFTC Enforcement Director David I. Miller stated that Ellison and Wang, as senior executives of Alameda and FTX, committed fraud and were held liable by the court, but their final penalties reflect the significant assistance they provided to the CFTC's investigation. Additionally, both have admitted to multiple crimes in related criminal cases, including conspiracy to commit commodities fraud, and jointly share responsibility for a forfeiture order of approximately $11.02 billion. This consent order marks the formal conclusion of the CFTC's enforcement actions against Ellison and Wang.