The story of the FTX empire's collapse has received one final chapter. The U.S. Commodity Futures Trading Commission (CFTC) has officially settled all claims against Caroline Ellison and Gary Wang, whose testimony proved decisive in the case against Sam Bankman-Fried (SBF). This decision finally closes the question of civil lawsuits against two key figures in the exchange's collapse.
Terms of the deal: bans instead of fines
According to the court-approved orders, Ellison, who headed the Alameda Research trading division, received a five-year ban on trading and a ten-year ban on registering as an operator. For Wang, co-founder and lead developer of FTX, the conditions were similar: five years without trading and eight years without registration. Notably, all restrictions apply retroactively — from December 2022, when the court first found them guilty of fraud.
This means Ellison will be able to return to trading activity as early as late 2027. The registration ban for Wang will expire in 2030, and for Ellison — in 2032. At the same time, the regulator completely waived demands for compensation, disgorgement, and civil penalties.
Why the regulator made concessions
The reasons for such a lenient approach are obvious. Both individuals provided unprecedented cooperation with the investigation and have already committed to paying $11.02 billion as part of criminal cases. As CFTC Enforcement Director David Ae emphasized, the nature of the sanctions reflects the substantial assistance they provided to the commission in investigations related to FTX.
Interestingly, the SEC chose a similar strategy in December, imposing equally lengthy position bans without new fines. Ellison received 10 years there, Wang — eight. The complete alignment of approaches by the two main U.S. regulators demonstrates a coordinated stance: key prosecution witnesses receive leniency in exchange for cooperation.
SBF watches from prison
While his former allies restore their rights, Sam Bankman-Fried continues to serve his 25-year sentence. The appeals court upheld the verdict in August, making it final. SBF has only two formal options left: an appeal to the Supreme Court or a presidential pardon. However, senators from both parties have already introduced a resolution against any pardon, making that scenario extremely unlikely.
Ellison, who served just 14 months of her two-year sentence, was released in January. Wang avoided prison entirely, receiving a sentence already served in pretrial detention — Judge Lewis Kaplan called his cooperation unprecedented. The liquidation of FTX assets is nearly complete, with only one dispute over claims remaining in the bankruptcy case.
My comment: This outcome is a striking example of the pragmatism of the American legal system. Regulators sacrificed symbolic fines to obtain evidence against the main defendant. However, for the market, this is a signal: even in the most high-profile fraud cases, cooperation with investigators remains the most reliable path to mitigating consequences. The question is whether this will serve as a lesson for future wrongdoers or, conversely, an incentive to seek loopholes.