3 Former Executives Involved With FTX Agree to SEC Final Judgments

Three former executives involved with bankrupt cryptocurrency exchange FTX have agreed to final judgments from the Securities and Exchange Commission (SEC), without denying the commission’s allegations, according to the SEC.

The SEC obtained the final judgments against Caroline Ellison, the former CEO of Alameda Research; Zixiao (Gary) Wang, the former chief technology officer of FTX Trading; and Nishad Singh, the former co-lead engineer of FTX, the commission said in a Friday (Dec. 19) press release.

The final judgments are subject to court approval, according to the release.

They include a 10-year officer-and-director bar for Ellison, and eight-year officer-and-director bars for Wang and Singh, together with five-year conduct-based injunctions for Ellison, Wang and Singh, per the release.

The SEC’s complaints alleged that while Sam Bankman-Fried and FTX raised money from investors by claiming the company was a safe crypto asset trading platform and Alameda had no special privileges, Ellison, Wang and Singh knew that Alameda had been exempted from risk mitigation measures and had been provided with a virtually unlimited “line of credit” funded by FTX’s customers, according to the release.

“The complaints also alleged that Wang and Singh created FTX’s software code that allowed FTX customer funds to be diverted to Alameda, and that Ellison used misappropriated FTX customer funds for Alameda’s trading activities,” the release said. “According to the complaints, Bankman-Fried, with the knowledge of Ellison, Wang and Singh, directed hundreds of millions of dollars more in FTX customer funds to Alameda, where these funds were used for additional venture investments and ‘loans’ to Bankman-Fried and other FTX executives, including Wang and Singh.”

The three former executives also faced criminal charges after the collapse of FTX, as did Bankman-Fried.

CoinDesk reported Friday that Ellison was given a two-year prison sentence, though she was recently released early, while Wang and Singh avoided jail time.

Bankman-Fried was convicted of fraud in 2023 and sentenced the following year to a 25-year prison sentence. At his trial, prosecutors called what happened to FTX a “fraud of epic proportions,” while the defense countered that Bankman-Fried had made mistakes at the company but had never stolen customer funds.