Ex-Alameda CEO Caroline Ellison Gets Two Years In Prison For Role In FTX Collapse

Caroline Ellison, former CEO of Alameda Research, has been sentenced to two years in a minimum-security prison.

She has been sentenced for her involvement in the collapse of FTX.

Ellison’s sentencing follows a plea deal. In it, she admits to charges including wire fraud and money laundering.

In exchange for her cooperation, she received a significantly reduced sentence from the potential maximum of 110 years.

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Ellison Ordered To Forfeit Over $11 Billion

Judge Lewis Kaplan, who presided over the case, described Ellison’s cooperation with prosecutors as “remarkable,” but emphasized that her role in the crimes made her “gravely culpable.”

She will forfeit more than $11 billion to the court. Furthermore, she may face additional financial penalties if restitution is deemed necessary.

Kaplan said that her assistance and expressions of remorse would not serve as a “get out of jail free card.” In court, Ellison expressed regret, apologizing to those affected by the scheme.

“On some level, my brain can’t even comprehend the scale of the harm that I caused,” she said, according to US media reports.

FTX, founded in 2019, rapidly grew to become the third-largest cryptocurrency exchange in the world, with a valuation of $32 billion at its peak. The company’s apparent success propelled Bankman-Fried to billionaire status and made him a prominent figure in the crypto world.

Today in Caroline Ellison (for the lols):

➡️ She got sentenced to 2 years in prison + has to "forfeit $11 billion" (more on second part later)

➡️ SBF got 25 years and Ryan Salame got 7.5 years. Why the big difference?

➡️ She cooperated early and often and testified for the… pic.twitter.com/cNt1zfAvAI

— Untamed Adam (@adamagb) September 25, 2024

However, in 2022, rumors of financial instability triggered a run on FTX’s deposits, leading to the company’s sudden collapse and the exposure of Bankman-Fried’s fraudulent activities.

During the trial, prosecutors detailed how Bankman-Fried misappropriated customer funds for real estate purchases, investments, and political donations.

The 29-year-old, who held a top executive position at the company, was also the former girlfriend of FTX founder Sam Bankman-Fried. The two shared a residence in the Bahamas, where FTX and Alameda Research were based, and jointly managed the intertwined businesses.

Bankman-Fried was previously sentenced to 25 years in prison for orchestrating a scheme that defrauded customers of over $8 billion.

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Ellison’s Testimony Against SBF Was Pivotal

Ellison’s testimony against Bankman-Fried was a pivotal moment in the high-profile trial. Over three days, she described how she and others were directed by Bankman-Fried to secretly divert customer funds from FTX.

While delivering an emotional testimony, she expressed deep regret for her actions and the damage they caused.

Prosecutors acknowledged her extensive cooperation.  She met with them approximately 20 times to assist in building the case against Bankman-Fried.

Furthermore, Ellison’s legal team also argued that her significant assistance should preclude a prison sentence.

In a related case, Ryan Salame, the co-CEO of FTX’s Bahamian subsidiary, was sentenced to 90 months in prison in May. Salame had pleaded guilty to charges of violating political campaign finance laws and operating an illegal money-transmitting business.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.