CFTC Imposes 5-Year Trading Ban on FTX Co-Founders Ellison and Wang

08/21 01:25

On August 21, the U.S. Commodity Futures Trading Commission (CFTC) announced that the U.S. District Court for the Southern District of New York has issued a supplemental consent order against Caroline Ellison, former CEO of Alameda Research, and Gary Wang, co-founder of Alameda and FTX, formally resolving the CFTC's enforcement actions against them. According to the court order, both Ellison and Wang are required to continue cooperating with the CFTC's investigation. Ellison has been imposed with a 5-year trading ban and a 10-year registration ban, while Wang faces a 5-year trading ban and an 8-year registration ban. The duration of the bans is calculated from the effective date of the initial consent order signed by both individuals on December 23, 2022. In 2022, the court found Ellison liable for two counts of fraud as alleged by the CFTC, while Wang was found liable for one count of fraud, and both have been permanently prohibited from violating the Commodity Exchange Act and related CFTC anti-fraud provisions. Notably, the CFTC is not currently seeking additional restitution, disgorgement of ill-gotten gains, or civil penalties against Ellison and Wang. The decision was partly based on their significant cooperation during the investigation and related litigation, including pleading guilty in federal criminal cases and assisting in the investigation of FTX-related matters. David I. Miller, head of the CFTC's enforcement division, stated that while Ellison and Wang, as senior executives of Alameda and FTX, committed fraud and were found liable by the court, their ultimate penalties reflect the important assistance they provided to the CFTC's investigation. Additionally, both have acknowledged multiple offenses, including conspiracy to commit commodity fraud, in the related criminal cases, and jointly bear approximately $11.02 billion in forfeiture liability. This consent order signifies the formal conclusion of the CFTC's enforcement actions against Ellison and Wang.
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