Former Alameda Research CEO Caroline Ellison, who also held a high position in the defunct crypto exchange FTX, has been sentenced to two years imprisonment for being a part of FTX fraud. She worked alongside Sam Bankman-Fried (SBF), her former boyfriend and FTX founder, in mismanaging user’s funds.
From Luxury to Prison
Following a thorough investigation, U.S. District Judge Lewis Kaplan has declared judgment on Ellison for supporting a crime that led to the loss of over $8 billion in customer funds deposited in the FTX exchange. Following the sentence, she will forfeit $11 billion and could pay more if ordered to do so.
Prior to her imprisonment, Ellison played a pivotal role in Bankman-Fried’s probe, providing the forces with crucial information that led to his conviction and arrest. Considering this, her defendant recommended she shouldn’t be sentenced to prison.
However, Judge Kaplan noted that Ellison had a hand in one of the most serious financial crimes ever committed in the United States, so there’s no way she is getting a “get out of jail free card.” Additionally, he iterated that Ellison’s “remarkable cooperation” is one of the reasons she’s getting only two years behind bars.
Before the court, Ellison apologized to the victims of the fraud. She said,
“I participated in a criminal conspiracy that ultimately stole billions of dollars from people who entrusted their money with us. I think, on some level, my brain can’t even truly comprehend the scale of the harm it caused. That doesn’t mean I don’t try. I am so, so sorry. I am deeply ashamed of what we had done,” she said.
FTX’s Ignoble End
Bankman-Fried, alongside Ellison and others, founded FTX crypto exchange and Alameda Research, with the then-courting couple serving as CEOs in both firms. Within two years, FTX was valued at $32 billion, becoming the third-largest crypto exchange in the world.
However, the company’s growth was marred in 2022 when rumors of the company’s financial crisis filled the media, exposing SBF’s crimes. After conducting investigations, the court sentenced him to 25 years in prison after he pleaded not guilty.
The court has taken legal action against those involved in the fraud case. In May 2024, it sentenced Ryan Salame, a former FTX executive, to 7.5 years in prison. Ellison’s punishment leaves a clue of what awaits two other main SBF allies, Gary Wang and Nishad Singh.
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