Former Alameda Research CEO Caroline Ellison has been barred from serving as an officer or director of a public company for the next 10 years, following final consent judgments obtained by the US Securities and Exchange Commission in connection with the collapse of crypto exchange FTX.
In a notice released Friday, the SEC confirmed that Ellison, along with former FTX executives Gary Wang and Nishad Singh, agreed to long-term leadership bans for their roles in the misuse of customer funds between 2019 and 2022. The penalties stem from civil enforcement actions tied to one of the largest financial fraud cases in US history.
The regulator said Ellison consented to a 10-year officer and director bar, while Wang and Singh each accepted eight-year bans. All three are also subject to five-year conduct-based injunctions that restrict their future activities in financial markets.
According to the SEC, the judgments resolve allegations that senior executives at FTX and Alameda Research deliberately bypassed internal risk controls, allowing billions of dollars in customer funds to be diverted without disclosure.
SEC details role of Caroline Ellison and former FTX executives
The SEC said its complaints alleged that Sam Bankman-Fried, Gary Wang, and Nishad Singh, with Caroline Ellison’s knowledge and consent, exempted Alameda Research from FTX’s risk mitigation measures. This exemption effectively gave Alameda access to a virtually unlimited line of credit funded by customer deposits on the exchange.
Regulators further alleged that Wang and Singh designed software code that enabled FTX customer funds to be transferred to Alameda. Ellison, who ran Alameda Research during the period in question, was accused of using misappropriated customer assets to support the trading firm’s operations and cover losses.
The SEC has consistently argued that these actions misled investors and customers about the true financial condition of both FTX and Alameda. The civil case is separate from criminal proceedings brought by the US Department of Justice, though the factual findings overlap.
Former FTX CEO Sam Bankman-Fried was sentenced to 25 years in prison earlier this year after being convicted on multiple counts of fraud and conspiracy. He is currently pursuing an appeal in the US Court of Appeals for the Second Circuit, following a hearing held on Nov. 4.
Ellison, Wang, and Singh all cooperated with prosecutors during Bankman-Fried’s criminal trial. Ellison testified extensively against her former partner and employer, while Wang and Singh also took the stand. Their cooperation played a role in reduced criminal sentences.
Ellison was sentenced to two years in prison under a plea agreement, while Wang and Singh were sentenced to time served in 2024.
Caroline Ellison set for early release as civil penalties take effect
While the SEC’s director ban will restrict Caroline Ellison from holding leadership roles for the next decade, her criminal sentence is nearing its end. The former Alameda CEO was recently transferred from prison to a Residential Reentry Management field office in New York City.
Federal Bureau of Prisons records show that Ellison is scheduled for release on Feb. 20, roughly nine months before the completion of her full two-year sentence. The early release suggests she qualified for good-conduct time credits under federal sentencing rules.
The SEC said the consent judgments were entered without the defendants admitting or denying the allegations. However, the agency emphasized that the penalties reflect the seriousness of the misconduct and serve as a warning to executives overseeing digital asset platforms.
For regulators, the case reinforces their stance that crypto firms and their leadership remain subject to traditional securities laws, regardless of the technology involved.
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