The Securities and Exchange Commission has formally requested significant industry bans for three former FTX executives who cooperated with prosecutors. Caroline Ellison faces a proposed 10-year prohibition, while Gary Wang and Nishad Singh could be barred for eight years, marking a definitive chapter in the regulatory fallout from one of crypto's biggest scandals.
The U.S. Securities and Exchange Commission has moved to impose substantial industry bans on three former executives at the center of the FTX collapse, despite their cooperation with federal prosecutors in the landmark case against Sam Bankman-Fried.
According to proposed consent judgments filed by the SEC, Caroline Ellison, the former CEO of Alameda Research, would face a 10-year prohibition from the securities industry. Meanwhile, FTX co-founder Gary Wang and former engineering director Nishad Singh would each receive eight-year bans from industry participation.
The proposed settlements come after all three individuals provided crucial testimony during the criminal trial of Sam Bankman-Fried, who was ultimately convicted on multiple counts of fraud and sentenced to 25 years in prison. Their cooperation was instrumental in securing the conviction of the disgraced FTX founder, yet the SEC's actions demonstrate that cooperation does not equate to immunity from regulatory consequences.
Caroline Ellison, who also served as Bankman-Fried's romantic partner during much of the fraud, pleaded guilty to multiple charges and received a two-year criminal sentence. Her role in directing Alameda Research's misuse of FTX customer funds proved central to the prosecution's case.
Gary Wang, who helped build FTX's technical infrastructure, and Nishad Singh, who oversaw engineering operations, similarly pleaded guilty and testified against their former colleague. Both received relatively lenient criminal sentences due to their substantial cooperation with authorities.
The SEC's proposed bans represent a standard regulatory approach in major securities fraud cases. While the agency typically considers cooperation when determining penalties, it maintains that individuals who violated securities laws must face consequences that protect future investors, even when they assist in prosecuting others.
These consent judgments, once finalized, will formalize the settlement terms between the SEC and the three executives. The lengthy prohibition periods effectively end their careers in traditional securities markets and send a clear message about accountability in the cryptocurrency sector.
The FTX collapse, which occurred in November 2022, resulted in billions of dollars in customer losses and triggered widespread calls for stronger cryptocurrency regulation. The coordinated criminal and civil enforcement actions against FTX executives represent one of the most significant regulatory responses to fraud in the digital asset space to date.