CFTC closes FTX cases against Caroline Ellison and Gary Wang without new fines

The CFTC has concluded its civil cases against former FTX executives Caroline Ellison and Gary Wang in relation to their roles in the FTX saga, and they have avoided more fines.

They both received temporary trading bans, and they can also not register with the regulator. Their cooperation with investigators helped with the outcome, and the regulator said that cooperation must continue, bringing another part of the FTX saga to an end.

CFTC gives Ellison and Wang temporary bans

Final orders were entered in a federal court on August 18, as seen in the court documents that were obtained.

Ellison[who ran Alameda Research] received a five-year trading ban and cannot register with the CFTC for ten years, while Wang [another co-founder of FTX & Alameda] also received a five-year ban with an eight-year registration restriction.

An important detail in those timelines is that the bans run from December 23, 2022, when the original consent orders were entered, meaning that both trading restrictions will expire in December 2027. The Ellison registration ban will last until December 2032, while that of Wang will end in December 2030.

But both remain permanently barred from violating the antifraud rules involved in their cases.

Cooperation helps them avoid new financial penalties

The CFTC isn’t currently seeking restitution, repayment of gains, or civil fines from either of them, and their assistance to investigators was one reason.

CFTC Enforcement Director David Miller said Ellison and Wang were senior executives who committed fraud at Alameda and FTX but noted the “material assistance” they provided during the investigation.

But that leniency comes with conditions.

They will continue to cooperate and attend interviews, hearings, or trials if required; if not, the CFTC will go back to court and seek financial penalties against the two of them.

Their criminal cases also influenced the regulator’s decision.

Ellison was given a sentence of 2 years in prison followed by three years of supervised release, and Wang was only given the time already served and three years of supervised release.

In addition, both remain also liable jointly for $11.02 billion from a forfeiture order made in the criminal proceedings.

Final Summary

• Ellison and Wang were banned by the CFTC from trading and registering temporarily as members back in December 2022.
• Whilst the CFTC has imposed no further financial penalty, it may pursue them via litigation against them if/when they decide to stop cooperating with ongoing investigations.