Regulatory and civil actions: CFTC, SEC and state regulators

analysisOn 21 December 2022 the Commodity Futures Trading Commission filed an amended complaint in the Southern District of New York (No. 1:22-cv-10503) against Bankman-Fried, FTX Trading Ltd. d/b/a FTX.com, Alameda Research LLC, Ellison and Wang under the Commodity Exchange Act. On 7 August 2024 the court entered a consent order against FTX Trading and Alameda finding that, as a common enterprise, they employed a scheme to defraud FTX customers and made material misrepresentations, presenting customer assets as held in custody and segregated when they were in fact commingled and misappropriated. It orders them, jointly and severally, to pay $8.7 billion in restitution and $4 billion in disgorgement, imposes injunctions and trading and registration bans and requires cooperation in the CFTC's continuing case; under a related settlement the CFTC did not seek a civil penalty, subordinated its claims to victims' and directed disgorgement to a supplemental remission fund. ^{1 2 3}

analysisThe two companies, by then run by the debtors' management, consented without a trial on the merits; they admitted the findings only for exceptions to discharge in bankruptcy and agreed they would be taken as true in proceedings involving the CFTC, keeping the right to take other positions elsewhere. The CFTC charged Singh on 28 February 2023 with fraud by misappropriation and with aiding and abetting the fraud of Bankman-Fried, FTX Trading and Alameda; according to the CFTC he did not contest liability and agreed to a proposed consent order, which was not retained. Wang consented to judgment on liability on 23 December 2022; a supplemental consent order of August 2026, citing his cooperation and criminal sentence, imposed no restitution, disgorgement or penalty but barred him from trading on or subject to the rules of registered entities for five years from the initial consent order of December 2022. ^{2 3 4 1}

analysisThe SEC sued Ellison and Wang on 21 December 2022 (No. 1:22-cv-10794) and Singh on 28 February 2023 (No. 1:23-cv-01691). Its complaint describes Ellison as employed at Alameda from about March 2018, co-chief executive from about October 2021 and sole chief executive from about August 2022, and Wang as co-founder and chief technology officer of FTX and co-founder and 10% owner of Alameda; both were dismissed on or about 18 November 2022. On 19 December 2025 the SEC filed proposed final consent judgments in which, without denying the allegations, the three agreed, subject to court approval, to permanent antifraud injunctions, five-year conduct-based injunctions and officer-and-director bars of ten years for Ellison and eight years for Wang and Singh. The retained records do not show the date the judgments were entered. ^{1 2}

analysisOn 22 November 2022 the Washington State Department of Financial Institutions issued a temporary order to cease and desist (No. C-22-3487-22-TD01) under the Uniform Money Services Act against West Realm Shires Services, Inc., d/b/a FTX US, a licensed money transmitter, alleging that as of 10 November 2022 it had suspended payments to customers and prevented transfers and withdrawals; it required the company to stop accepting new business from Washington residents while letting them withdraw their assets. It is a temporary order based on the department's allegations, and no final order was retained. FTX Trading Ltd.'s statement of financial affairs also lists 67 pending legal actions, mostly trademark oppositions and cancellations over FTX marks in at least ten countries, and an intellectual property dispute with Bybit Fintech Limited in Singapore. ^{1 2}