Three former executives of FTX and its affiliates have accepted final penalties from the U.S. Securities and Exchange Commission as the agency resolves an enforcement case related to the exchange’s collapse, the SEC said in a notice of the lawsuit on Friday.
Caroline Ellison, the former CEO of its Alameda research unit whose former CEO Sam Bankman-Fried continues to serve time in federal prison on fraud charges, was among those who agreed to the sentence to resolve enforcement actions filed in 2022 and 2023, which still require court approval. Others who signed the agreement include Zixiao “Gary” Wang, former chief technology officer of FTX Trading, and Nishad Singh, former co-chief engineer of FTX.
The SEC said they would each be barred from serving as officers or directors of other companies, with Ellison receiving a 10-year ban and the others receiving an eight-year ban. They were also subject to a five-year “conduct-based ban”, the agency said.
“Bankman-Fried, Wang and Singh, with Ellison’s knowledge and consent, waived Alameda’s risk mitigation measures and provided Alameda with a virtually unlimited ‘line of credit’ funded by FTX clients,” according to the SEC’s statement. “The complaint also alleges that Wang and Singh created FTX’s software code that allowed FTX client funds to be transferred to Alameda, and that Ellison used misappropriated FTX client funds for Alameda’s trading activities.”
Ellison was sentenced to two years in prison for her role in the FTX fraud, but she was reportedly recently released from prison early. Wang was a key cooperating witness in the government’s case and, like Singer, avoided jail time.
