SEC Secures Final Judgments Against Former FTX Executives in Fraud Case

The U.S. Securities and Exchange Commission (SEC) has finalized its civil enforcement action against three key figures from the collapsed FTX empire, securing court-approved consent judgments that impose permanent injunctions and multi-year officer-and-director bars. The agency announced on December 19, 2025, that it filed proposed final judgments in the U.S. District Court for the Southern District of New York for Caroline Ellison, the former CEO of Alameda Research; Gary Wang, the former Chief Technology Officer of FTX; and Nishad Singh, the former Co-Lead Engineer of FTX.

The SEC's complaints, filed in December 2022 against Ellison and Wang and in February 2023 against Singh, alleged a coordinated scheme that spanned from at least May 2019 through November 2022. According to the agency, Samuel Bankman-Fried, along with Wang and Singh, with Ellison's knowledge and consent, engineered a system that falsely marketed FTX as a secure trading platform with robust risk controls while secretly exempting its sister hedge fund, Alameda Research, from those same safeguards. This arrangement allowed Alameda to access a virtually unlimited line of credit funded by FTX customer deposits, a privilege not disclosed to investors or users.

The core of the alleged fraud centered on the diversion of customer funds. The SEC contends that Wang and Singh, as the architects of FTX's software, created code that enabled the seamless transfer of customer assets to Alameda. Ellison, as Alameda's CEO, then allegedly used these misappropriated funds for the hedge fund's trading activities. The complaints further detail that Bankman-Fried directed hundreds of millions of additional dollars to Alameda, where the capital was deployed for venture investments and personal "loans" to executives, including Wang and Singh. This structure effectively treated customer funds as a proprietary capital pool for Alameda and its principals, a direct contradiction of the platform's public representations.

The final judgments, which are subject to court approval, require Ellison, Wang, and Singh to consent to the entry of permanent injunctions. These injunctions bar them from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as Section 17(a) of the Securities Act of 1933. Additionally, all three individuals are subject to 5-year conduct-based injunctions, which are designed to prevent future violations through specific behavioral restrictions.

Beyond the injunctions, the executives face significant career restrictions. Caroline Ellison has consented to a 10-year bar from serving as an officer or director of any public company. Gary Wang and Nishad Singh have each consented to an 8-year officer-and-director bar. These sanctions represent a lasting consequence of their roles in the FTX collapse, effectively removing them from leadership positions in the public markets for a substantial period.

The SEC's litigation was handled by Amy Burkart, with the investigation conducted by Burkart, Devlin Su, Ivan Snyder, David S. Brown, Brian Huchro, and Pasha Salimi. The investigation was supervised by Laura D'Allaird and Amy Flaherty Hartman of the Enforcement Division’s Cyber and Emerging Technologies Unit, along with Michael Brennan. This case underscores the SEC's focus on holding individuals accountable in the cryptocurrency sector, particularly where corporate structures are used to obscure the misuse of customer assets.

For context, the FTX collapse in November 2022 sent shockwaves through the crypto industry, leading to billions in customer losses and triggering numerous regulatory and legal actions. The SEC's civil case is separate from criminal proceedings, including the trial and sentencing of Samuel Bankman-Fried, who was found guilty of multiple counts of fraud and conspiracy in November 2023. The final judgments against Ellison, Wang, and Singh mark a significant milestone in the SEC's efforts to address the misconduct that contributed to one of the largest financial frauds in recent history. The agency's approach highlights the importance of transparency in crypto platforms and the legal risks for executives who enable or participate in the diversion of customer funds. The case also serves as a cautionary tale for the broader fintech and crypto ecosystem, where innovative technology must be coupled with rigorous compliance and ethical governance to protect investors and maintain market integrity.