Caroline Ellison, Ex-Alameda CEO, Gets 2 Years for FTX Fraud

Caroline Ellison, the former CEO of Alameda Research, has been sentenced to two years in prison for her involvement in the massive FTX fraud. In addition to her prison time, a federal judge has ordered Ellison to forfeit around $11 billion. This sentencing comes after her key role in the collapse of FTX, one of the largest cryptocurrency exchanges, which left many investors and users facing huge losses.

Former Alameda Research CEO Caroline Ellison Gets 2 Years in Prison for FTX Fraud Role

Caroline Ellison, the former CEO of Alameda Research, was sentenced to two years (24 months) in prison on Tuesday by a federal judge.

In addition to the prison sentence, Ellison, 29, has been ordered to forfeit around $11 billion. The judge indicated that she may serve her time at a minimum-security facility located near Boston, where her family resides. Following her imprisonment, Ellison will also face three years of supervised release.

Judge Lewis A. Kaplan showed some leniency towards Ellison, noting her significant role as a key witness in the governments case against Sam Bankman-Fried, the founder of FTX and Ellisons former boyfriend. "You were vulnerable and taken advantage of," Kaplan remarked before delivering his decision. "It is clear that you are sincerely remorseful."

Kaplan also acknowledged Ellison's cooperation with the authorities, stating, "In my 30 years, Ive seen many who cooperated with the court, but none quite like Ms. Ellison."

Ellisons Cooperation Acknowledged, But Scale of FTX Fraud Demands Prison Time

According to reports, despite Caroline Ellison's cooperation, Judge Lewis Kaplan made it clear that the scale of the FTX fraud warranted a prison sentence. "In a case of this magnitude, offering a 'get out of jail free' card isn't something I can justify," he said before handing down her two-year prison term. Since this is a federal case, Ellison will be required to serve at least 75% of her sentence before being eligible for parole.

Ellison played a key role as a witness against Sam Bankman-Fried in his trial last year, accusing him of bribing foreign officials and knowingly presenting false financial data to lenders.

Prosecutors emphasized the significance of her testimony, calling it a pivotal factor in Bankman-Frieds conviction on all seven counts of fraud and conspiracy. Earlier this year, Bankman-Fried was sentenced to 25 years in prison, although he is currently appealing the conviction. Assistant U.S. Attorney Danielle Sassoon, who led the prosecution, reiterated in court that Ellisons cooperation was critical in securing the conviction.

Sassoon noted that Ellison's willingness to work with authorities and show remorse set her apart from Bankman-Fried, who displayed no such regret. She argued that while Bankman-Frieds sentence served as a deterrent, Ellisons punishment should reflect her assistance and acknowledgment of wrongdoing.

Ellisons defense team pushed for leniency, citing her "exceptional cooperation" and low risk of reoffending. Both her lawyers and the probation department had recommended a sentence of time served, followed by three years of probation.

Her attorney, Anjan Sahni, portrayed Ellison as a victim of manipulation by Bankman-Fried, with whom she had a personal relationship. Sahni explained that her involvement in the scheme was driven by her desire to gain his approval, but after the downfall of FTX, she "recovered her moral bearings."

In a brief statement before sentencing, Ellison expressed deep regret, offering apologies to FTX and Alamedas former clients, as well as her friends, family, and colleagues. "Its hard to fully grasp the scale of damage I've caused," she said, her voice wavering. "The human brain struggles with large numbers, and I cant imagine the pain Ive inflicted."

Ellison has 45 days to voluntarily surrender to begin her sentence.

Reflecting on her journey, she said, "If youd told me in 2018 that Id end up pleading guilty to fraud, I wouldve thought it was impossible. Each step made it harder to break free... I regret not having the courage to stop sooner."

Text source: CryptoTicker

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