Caroline Ellison Sentenced to Two Years in Prison for FTX Fraud

Journalist

Tanzeel Akhtar

Journalist

Tanzeel Akhtar

About Author

Tanzeel Akhtar has been covering the cryptocurrency and blockchain sector since 2015. She has written for the Wall Street Journal, Bloomberg, CoinDesk and Bitcoin Magazine.

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Last updated:

September 25, 2024 00:24 EDT

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Caroline Ellison, former CEO of Alameda Research, has been sentenced to two years in prison for her role in the collapse of the now-defunct cryptocurrency exchange FTX.

Ellison, 29, was sentenced at the United States Southern District of New York on September 24. She appeared before Judge Lewis Kaplan in the Manhattan federal courthouse.

Kaplan described Ellison’s cooperation with prosecutors as “remarkable”, adding that he was not comfortable with remorse and cooperation being a “get out of jail free card” in a case so serious, reports Reuters.

Ellison also had a personal relationship with FTX founder, Sam Bankman-Fried, who was recently sentenced to 25 years in prison for embezzling over $8 billion from the company’s customers.

Her sentencing follows a plea deal in which she admitted to charges of wire fraud and money laundering. As part of her cooperation with prosecutors, she testified against Bankman-Fried, providing crucial details about the inner workings of the fraudulent scheme.

In addition to her prison term, Ellison has been ordered to forfeit assets worth more than $11 billion though this amount may increase if further restitution is demanded.

Caroline Ellison Played Critical in Bankman-Fried’s Conviction

Caroline Ellison’s testimony against Bankman-Fried was critical in securing his conviction. He was found guilty of orchestrating a massive fraud by misappropriating customer funds to make risky investments, fund lavish lifestyles, and donate to political campaigns.

Bankman-Fried has attempted to discredit Ellison as a witness by releasing pages of her personal diary to The New York Times ahead of his trial.

Earlier this month, Bankman-Fried’s legal team filed a request for a new trial, claiming he was denied a fair hearing during his criminal conviction. In a brief filed with the US Court of Appeals for the Second Circuit. they argued that federal prosecutors were more focused on securing quick headlines than ensuring a just trial.