Caroline Ellison, the former CEO of Alameda Research and ex-girlfriend of FTX founder Sam Bankman-Fried, received a two-year prison sentence on Tuesday for her involvement in the theft of $8 billion in customer funds from the now-defunct cryptocurrency exchange. The sentencing took place in Manhattan federal court, where U.S. District Judge Lewis Kaplan acknowledged her significant cooperation with prosecutors but emphasized the severity of her crimes.
Judge Kaplan expressed concern that demonstrating remorse and cooperation should not serve as a “get out of jail free card” in such a serious case, highlighting the gravity of what prosecutors have labeled one of the largest financial frauds in U.S. history.
At just 29 years old, Ellison pleaded guilty to seven felony counts of fraud and conspiracy. She provided critical testimony against Bankman-Fried, who was convicted last year and is currently serving a 25-year sentence for his role in the catastrophic collapse of FTX in 2022. The charges against Ellison could have resulted in a maximum sentence of 110 years in prison, but her legal team argued for leniency due to her cooperation with the investigation.
Despite recognizing her “remarkable cooperation,” Judge Kaplan stated that Ellison was “gravely culpable” in the fraud. He noted that her collaboration with authorities set her apart from Bankman-Fried, but he did not dismiss the seriousness of her actions. “There’s no way you’re ever going to do something like this again, I am persuaded,” he told her. However, he concluded, “this was, if not the very greatest financial fraud ever perpetrated in this country or anywhere else, close to it.”
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