Caroline Ellison, former CEO of Alameda Research, was sentenced to 24 months in prison by U.S. District Judge Lewis Kaplan for her involvement in the financial crimes related to the collapse of FTX.
This sentencing comes despite Ellison’s extensive cooperation with prosecutors. She played a key role in exposing the fraudulent activities led by her ex-boyfriend and FTX founder, Sam Bankman-Fried.
Ellison, 29, pled guilty to wire fraud and conspiracy to commit money laundering in December 2022. She was a central figure in unraveling Alameda Research and its close relationship with FTX, leading to both companies’ bankruptcies. “I participated in a criminal conspiracy that ultimately stole billions of dollars from people who entrusted their money with us,” Ellison said in her statement to the court, adding that it was a “relief” to cooperate with authorities fully.
Judge Kaplan described her cooperation as “remarkable. “ She met with prosecutors more than 20 times and provided crucial testimony during Bankman-Fried’s trial, which took place in New York in late 2023. During her testimony, Ellison admitted that Bankman-Fried had directed her to use FTX customer funds to cover trading losses at Alameda. She said she felt “indescribably bad” about the fraud in her tearful testimony.
Though prosecutors lauded her assistance and called her an “exemplary” witness, Judge Kaplan noted that Ellison was “gravely culpable” in the conspiracy. “Her cooperation is not a ‘get out of jail free card,'” Kaplan emphasized. Ellison was also ordered to forfeit over $11 billion to the court and could face additional restitution if required.
The sentencing occurred in New York’s federal court, nearly two years after the financial scandal began unraveling in November 2022. Bankman-Fried, convicted earlier this year, received a 25-year sentence in March 2024.
Despite legal experts speculating that Ellison might avoid jail time entirely due to her cooperation, her sentence aligns with the gravity of the fraud, which U.S. Securities and Exchange Commission Chairman Gary Gensler described as a “house of cards.” The crimes led to the downfall of FTX, once valued at $32 billion and one of the largest cryptocurrency exchanges in the world.
According to reports, Ellison is expected to spend her time at a minimum-security institution.
