Caroline Ellison, the former head of Alameda Research, was sentenced on Tuesday to two years in prison for her role in the multi-billion-dollar fraud at crypto exchange FTX and its sister firm, Alameda.
Caroline Gets A Light Sentence After Testifying Against SBF
Caroline Ellison, a key witness in the conviction of FTX co-founder and former CEO Sam Bankman-Fried, was sentenced by Judge Lewis A. Kaplan to 24 months — or two years — in a minimum security prison for her role in the former boyfriend’s theft of $8 billion in client funds from the now-defunct exchange, even as the judge recognized her strong cooperation with prosecutors.
“I’ve seen a lot of cooperators in 30 years,” said Kaplan, according to Bloomberg. “I’ve never seen one quite like Ms. Ellison.”
Kaplan also determined that Ellison, 29, must forfeit the $11 billion she earned from FTX.
Ellison pled guilty in December 2022 to two counts of wire fraud and conspiracy to commit wire fraud, as well as conspiracy to commit money laundering, commodities fraud, and securities fraud. However, she struck a deal with federal prosecutors at the time to serve as a government witness against Bankman-Fried in the hopes of securing a lenient sentence.
During his criminal trial last year, the star witness testified against her former colleague and lover, telling the court that SBF attempted to bribe foreign officials and intentionally shared false financial data with lenders.
Ellison’s crimes carried a maximum prison sentence of 110 years, but Kaplan appeared sympathetic to her.
“You’re a very strong person, Ms. Ellison, in some ways, but not inviolable. Mr. Bankman-Fried had your Kryptonite. “You were vulnerable and you were exploited,” the judge reportedly told her. “You are genuinely remorseful.”
Ellison addressed the court on Sept. 24 before her sentencing and said she wanted to apologize to FTX and Alameda’s former customers who lost their money due to her actions. She said, “Not a day goes by that I don’t think about all of the people I hurt.”
Ellison’s attorneys had recommended Ellison receive three years of “supervised release” with no prison time because of her “extraordinary cooperation”, but Kaplan asserted at the sentencing that there would be no “get out of jail free” card due to the magnitude of the fraud.
Meanwhile, Sam Bankman-Fried received a 25-year sentence earlier this year, although he has since appealed the conviction.
