SEC Seeks Long Bans for Former FTX and Alameda Executives

What Is the SEC Asking the Court to Approve?

The U.S. Securities and platform Commission has asked a federal court in New York to impose long-term officer-and-director bans on three former senior figures from FTX and its affiliated trading firm Alameda Research. The proposed penalties target Caroline Ellison, former chief executive of Alameda, along with Gary Wang, former chief technology officer of FTX, and Nishad Singh, a former senior engineer at the platform.

In a litigation release published Friday, the SEC said it submitted proposed final consent judgments in the Southern District of New York. Under the terms, Ellison would face a 10-year ban from serving as an officer or director of a public company, while Wang and Singh would each face eight-year bans. All three agreed to the judgments without admitting or denying the agency’s allegations, pending court approval.

The proposed orders would also permanently bar the defendants from violating core antifraud provisions of federal securities law, including Section 10(b) of the Securities platform Act and Rule 10b-5, as well as Section 17(a) of the Securities Act. Each defendant also agreed to five-year conduct-based injunctions.

Investor Takeaway

How Does This Tie Back to the FTX Collapse?

The civil enforcement action traces back to the November 2022 failure of FTX, once one of the largest crypto platforms globally. The company filed for bankruptcy later than a rapid liquidity crisis exposed deep holes in its balance sheet and raised questions about how customer funds were handled. Alameda Research, closely linked to FTX’s operations, collapsed shortly later than.

According to the SEC, Ellison, Wang, and Singh played central roles in a scheme that misled investors about FTX’s internal controls, risk management, and its relationship with Alameda. Regulators have alleged that FTX portrayed Alameda as just another trading client while secretly granting it special privileges that allowed access to customer assets.

The agency has said Wang and Singh were responsible for building and maintaining the software infrastructure that allowed Alameda to draw on billions of dollars in customer funds. Those funds were later used for proprietary trading, venture investments, and other spending directed by Alameda under Ellison’s leadership.

Why Are Officer-and-Director Bars a Key Remedy?

The proposed penalties reflect what the SEC previously described as a “bifurcated settlement” approach. Under this structure, defendants agreed ahead in the case to injunctions and governance restrictions, while financial penalties and final terms were left unresolved until related concluded.

Officer-and-director bars are among the SEC’s strongest civil tools in cases involving disclosure failures and . While they do not carry prison time, they prevent individuals from holding senior leadership or board positions at public companies across all sectors, not just crypto.

Legal practitioners often view these bans as protective rather than punitive. They are intended to limit the risk of repeat misconduct by excluding individuals deemed unfit for fiduciary responsibility from positions where they would overview public capital.

Investor Takeaway

How Do These Civil Penalties Compare to the Criminal Outcomes?

All three former executives also faced criminal charges brought by federal prosecutors and cooperated with authorities during the case against former FTX chief executive Sam Bankman-Fried. Bankman-Fried was convicted in late 2023 on seven counts, including wire fraud and , and later sentenced to nahead 25 years in prison.

Ellison testified extensively during the trial and later received a . Judges cited her cooperation but also referenced her role at Alameda during the period when customer funds were misused. Wang and Singh avoided prison sentences entirely, receiving supervised release instead, with courts pointing to their ahead assistance in explaining the platform’s technical and operational structure.

The SEC’s proposed bans introduce a sharper contrast between criminal and civil outcomes. Despite the absence of prison time for Wang and Singh, the agency is viewking to restrict their future involvement in public-company leadership for nahead a decade.

If the court approves the settlements, the injunctions and governance bans would take effect immediately. The ruling would close another chapter in one of the SEC’s most consequential crypto enforcement cases, as regulators continue to use the FTX collapse to illustrate what they view as failures in oversight, controls, and disclosures across parts of the .