FTX's two cooperators pay nothing, and their clock began in 2022
The Commodity Futures Trading Commission closed its cases against Caroline Ellison and Gary Wang with no restitution, no disgorgement and no civil penalty.
Exchange
FTX Trading Ltd
The centralised digital asset derivatives platform, trading as FTX.com, whose collapse the Commodity Futures Trading Commission says cost customers more than $8bn of deposits. Its own code carried a flag that let an affiliated market maker draw on those deposits without limit, and the last two individual cases closed on 19 August 2026.
The profile
The Commission's complaint of 13 December 2022 describes FTX.com as a centralised digital asset derivative platform that Samuel Bankman-Fried controlled from at least May 2019 through 11 November 2022, alongside Alameda Research LLC, a digital asset trading firm that operated as a primary market maker on it. The platform held itself out as the safest and easiest way to buy and sell crypto and represented that customer assets, both fiat and digital, were held in custody by FTX and segregated from its own; the Commission alleges they were routinely accepted and held by Alameda instead, commingled with Alameda's funds and appropriated for luxury real estate, political contributions and illiquid digital asset investments. The mechanism was in the software rather than in the paperwork. At Bankman-Fried's direction, employees created an allow-negative flag and an effectively limitless line of credit for Alameda, quicker execution times, and an exemption from the platform's distinctive auto-liquidation risk management process; the amended complaint of 21 December 2022 says those code features and structural exceptions let the affiliate secretly and recklessly siphon customer assets. Two of the individual defendants, Caroline Ellison and Zixiao Gary Wang, conceded liability within days and their cases closed with supplemental consent orders entered on 18 August 2026; the criminal court entered a forfeiture order of $11.02bn for which both were jointly and severally liable, and the Commission's action against Bankman-Fried remains before the Southern District of New York.
Products and services
- FTX.com
- The centralised digital asset derivative platform at the centre of the case. It marketed itself, on the Commission's account, as the safest and easiest way to buy and sell crypto, and told customers that their fiat and digital assets were held in custody and segregated from the platform's own assets.
- The allow-negative flag
- A feature written into the platform's own code at its controller's direction, which let Alameda Research execute transactions without sufficient funds available and carry what the Commission calls an effectively limitless line of credit against customer deposits held on the platform.
- Auto-liquidation exemption
- The exception from the platform's distinctive auto-liquidation risk management process granted to the affiliated market maker, alongside quicker execution times. The amended complaint pleads it as one of the structural exceptions that gave Alameda an unfair advantage when transacting.
Coverage
Developments in which FTX Trading Ltd is a named party, newest first.
On the record
CFTC closes its FTX cases against Ellison and Wang with no penalty
The Southern District of New York entered supplemental consent orders against Caroline Ellison and Gary Wang on 18 August 2026, announced by the Commission on the 19th. No restitution, disgorgement or civil monetary penalty is imposed, in consideration of cooperation and an $11.02bn criminal forfeiture; the trading and registration bans run from the initial consent orders of 23 December 2022.
Sources
- Commodity Futures Trading Commission: CFTC Charges Sam Bankman-Fried, FTX Trading and Alameda with Fraud and Material Misrepresentations, release 8638-22, 13 December 2022
- Commodity Futures Trading Commission: CFTC Charges Alameda CEO and Alameda and FTX Co-Founder with Fraud in Action Against Sam Bankman-Fried and his Companies, release 8644-22, 21 December 2022
- US District Court for the Southern District of New York: supplemental consent order against Caroline Ellison, CFTC v. Bankman-Fried, 22-cv-10503-PKC, entered 18 August 2026