- Caroline Ellison has been sentenced to 24 months in prison for her role in the FTX collapse
- Ellison, a former executive of Alameda Research, cooperated extensively in the trial against FTX founder Sam Bankman-Fried
- Her cooperation led to a more lenient sentence, despite facing multiple charges, including fraud and money laundering
Caroline Ellison, the former head of Alameda Research, has been sentenced to 24 months in prison for her involvement in the FTX fraud case. Despite facing charges that could have resulted in a sentence of over 100 years, her cooperation with prosecutors played a pivotal role in securing a reduced penalty. Ellison had been a key witness in the conviction of Sam Bankman-Fried, founder of the now-bankrupt crypto exchange FTX, which collapsed in 2022 in an $8 billion fraud.
Exemplary Cooperation
Ellison, once a close confidante and romantic partner of Bankman-Fried, led Alameda Research, the trading firm at the center of FTX’s collapse. FTX, once valued at $32 billion, imploded when it was revealed that customer funds were being misused to cover risky trades made by Alameda. In court, Ellison admitted her role in the fraudulent operations and expressed regret, stating, “I want to start by saying how sorry I am.”
Judge Lewis Kaplan, who also sentenced Bankman-Fried to 25 years, acknowledged Ellison’s significant cooperation with the government:
I’ve seen a lot of cooperators in 30 years. I’ve never seen one quite like Ms. Ellison.
While her cooperation led to a more lenient sentence, Ellison was still held accountable for her role in the scheme. In addition to serving two years in prison, she has been ordered to forfeit $11 billion in assets, a fact which led to amazement on social media:
$11 billion? More of a headline than 2 years. Wtf! pic.twitter.com/w6auCY7pTB
— Teton (@TetonTrading) September 24, 2024
Prosecutors had not recommended a specific sentence, instead emphasizing the unprecedented public scrutiny Ellison had endured.
Ellison’s testimony during Bankman-Fried’s trial was instrumental in securing his conviction. She admitted that she had knowingly misused FTX customer funds under Bankman-Fried’s direction, further implicating the disgraced founder.
Her personal struggles and relationship with Bankman-Fried had also drawn significant media attention, adding another layer of complexity to her involvement in the scandal.
