SEC Finalizes Penalties Against Former FTX Executives in Enforcement Actions

Three former top executives of collapsed cryptocurrency exchange FTX and its affiliated firms have agreed to final punishments from the U.S. Securities and Exchange Commission (SEC), marking another major step in resolving enforcement actions tied to one of the largest scandals in crypto history. The SEC confirmed the developments in a litigation notice released Friday, as fallout from the FTX collapse continues to ripple across the digital asset industry.

The executives include Caroline Ellison, former CEO of Alameda Research; Zixiao “Gary” Wang, former chief technology officer of FTX Trading; and Nishad Singh, former co-lead engineer of FTX. All three consented to judgments related to SEC enforcement cases filed in 2022 and 2023. The agreements are still subject to court approval.

Under the proposed settlements, all three individuals will be barred from serving as officers or directors of public companies. Ellison accepted a 10-year ban, while Wang and Singh each agreed to eight-year prohibitions. In addition, they are subject to five-year conduct-based injunctions, according to the SEC.

The agency alleged that Sam Bankman-Fried, along with Wang and Singh, knowingly exempted Alameda Research from standard risk controls on the FTX platform, effectively giving the trading firm a nearly unlimited line of credit backed by customer funds. The SEC further stated that Wang and Singh helped develop software code that enabled the diversion of customer assets to Alameda, while Ellison allegedly used those misappropriated funds for trading activities at the hedge fund.

Sam Bankman-Fried, the former CEO of FTX, is currently serving a federal prison sentence following fraud convictions. Ellison previously received a two-year prison sentence for her role in the fraud and was recently released early, according to Federal Bureau of Prisons records. Wang and Singh, both of whom cooperated extensively with prosecutors, avoided prison time.

The SEC’s actions underscore continued regulatory scrutiny of crypto executives and highlight the long-term consequences of governance failures and misuse of customer funds in the digital asset sector.