The story of the FTX collapse, perhaps the most high-profile bankruptcy in the history of the crypto industry, is nearing its finale. I am watching as U.S. regulators finally close the matter with the key prosecution witnesses in the case against Sam Bankman-Fried (SBF). The U.S. Commodity Futures Trading Commission (CFTC) has officially approved all agreements with former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang. This decision marks the final point in a multi-year proceeding that began shortly after the collapse of the empire in November 2022.
Terms of the Deal: Bans Instead of Fines
The sanctions, approved by the federal court in New York, are more symbolic than financial in nature. Ellison received a five-year ban on trading and a ten-year ban on registration with the CFTC. Wang was given a similar five-year trading ban and an eight-year registration ban. These restrictions apply retroactively—from December 2022. Thus, Ellison will be able to return to trading activity as early as the end of 2027, and Wang in 2030.
Notably, the regulator declined to demand additional compensation, disgorgement of funds, or civil penalties. The reason is obvious: both individuals actively cooperated with the investigation and are already required to pay $11.02 billion in criminal cases. As CFTC Director of Enforcement David Aye emphasizes, the nature of the sanctions reflects the substantial assistance they provided to the Commission in investigations related to FTX.
This approach fully mirrors the SEC's strategy, which previously also imposed long-term position bans without new fines. The coincidence is not accidental—it is a clear signal to the market that cooperation with investigators is a key factor in sentencing.
SBF: Loneliness in Prison and Faint Hopes
The contrast between the fates of the insiders and their former boss is striking. Ellison, sentenced to two years, was already released in January after serving just 14 months. Wang avoided prison altogether—in November 2024, Judge Lewis Kaplan ruled his time served in pre-trial detention, noting an unprecedented level of cooperation.
Sam Bankman-Fried, who chose the path of fighting, is serving a 25-year sentence. The appellate 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 this scenario practically unrealistic.
The liquidation of the companies' assets is nearing completion, with only one dispute over claims remaining in the bankruptcy case. The insiders who testified against the former head are building new lives. The question now is whether the man they pointed to will serve all 25 years.
My analysis: This case is a precedent that will define the rules of the game in the crypto industry for a long time. Regulators have demonstrated that they are willing to offer lenient terms to those who assist the investigation, but are ruthless toward those who try to deny the obvious. For the market, this is a signal: the era of irresponsibility in managing crypto exchanges is over.