Caroline Ellison, the former CEO of Alameda Research and a key witness in the prosecution of her ex-partner Sam Bankman-Fried (SBF), was sentenced to two years in prison on Tuesday for her part in the FTX fraud.
The sentence came Tuesday in New York federal court, where Judge Lewis Kaplan also ordered Ellison to pay $11 billion for his role in the massive fraud that led to the collapse of FTX, which was once worth $32 billion.
FTX Collapse Wants Another Prisoner
According to CNBC reportthe two-year prison sentence was significantly harsher than the recommendation from the Department of State Probation, which had recommended a sentence of three years of supervised release without prison. Ellison’s defense team also did not seek arrest, arguing for leniency based on his cooperation with authorities.
Ellison’s Company, The Alameda Studyrecovered a significant portion of the estimated $8 billion in Bankman-Fried misappropriation from FTX. These funds were allegedly used for the Alameda trade and other activities.
During the sentencing, Judge Kaplan commended Ellison cooperation and prosecution, which played a key role in Bankman-Fried’s conviction. However, he emphasized the need for a sentence that would deter potential fraudsters, saying, This case is probably the biggest financial fraud committed in US history.
It is reported that the judge agreed that Ellison was emotionally traumatized during the trial. Commenting on her unique partnership, she noted, “I’ve seen a lot of people who have partnered with her over the years, and I’ve never seen one like Miss Ellison.”
Assistant U.S. Attorney Danielle Sassoon advocated for a lighter sentence, citing Ellison’s truthful testimony and significant help in securing Bankman-Fried’s conviction earlier this year.
Free on Bail Until November 7th
In his statement to Judge Kaplan in court, Ellison expressed remorse and said he was “deeply ashamed and sorry” to those affected by his actions. He admitted that he failed to leave the “toxic environment” of FTX and Bankman-Fried, which he now regrets.
Judge Kaplan allowed Ellison to remain free on bail until his surrender date on or after November 7. He had previously reached a deal with prosecutors in December 2022, pleading guilty to conspiracy and conspiracy. financial fraud costs following the bankruptcy of FTX.
In contrast, Sam Bankman-Fried chose to stand trial and was found guilty of seven of the charges against him. receiving a sentence of 25 years in prison in March 2024 and a forfeiture order of 11 billion. Bankman-Fried has since appealed her case, alleging bias by Judge Kaplan.
Additionally, two FTX managers, Gary Wang and Nishad Singh, are awaiting sentencing later this year after pleading guilty. Their cooperation, like Ellison’s, may contribute to a lighter sentence.
At the time of writing, the exchange’s native token, FTT, was trading at $1.425, up 5% and 12% over a 24-hour and seven-day period, respectively, amid a broader market rally.
Featured image from DALL-E, chart from TradingView.com