Former executives from FTX and Alameda Research have received multi-year trading and registration bans following consent orders entered by the US District Court for the Southern District of New York.
The orders, issued on Tuesday in connection with a 2022 enforcement action by the US Commodity Futures Trading Commission (CFTC), impose a five-year trading ban on former Alameda Research CEO Caroline Ellison and FTX co-founder Zixiao “Gary” Wang. Additionally, Ellison received a 10-year registration ban, and Wang received an eight-year registration ban.
CFTC enforcement director David Miller stated that the orders reflect Wang and Ellison providing material assistance in investigations related to FTX. This civil case remains separate from the criminal proceedings concerning the misuse of customer funds at FTX, which previously resulted in a two-year prison sentence for Ellison and time served for Wang.
In a separate legal matter on Wednesday, US government lawyers in the Southern District of New York filed an opposition to a motion to dismiss brought by Gannon Ken Van Dyke. Van Dyke, a US soldier, allegedly earned over $400,000 using event contracts on the prediction market platform Polymarket with nonpublic information. He was tied to the military operation that removed Venezuelan President Nicolás Maduro in January.
Van Dyke’s July 31 motion to dismiss argued that the Commodity Exchange Act is ambiguous regarding the treatment of event contracts as swaps under CFTC jurisdiction. The US government countered on Wednesday by stating that Van Dyke's motion relies on hypotheticals, edge cases, and speculative assertions about facts that are inappropriate to decide at the motion-to-dismiss stage.
SDNY Deputy US Attorney Sean Buckley noted that the defendant's arguments improperly draw inferences from the indictment and incorrect conclusions regarding the nature of the charges. As of Friday, the court had not posted a public decision on the motion.
