Caroline Ellison, former CEO of Alameda Research and key player in the FTX cryptocurrency fraud, has been sentenced to two years in prison for her role in the $8 billion scheme that led to the collapse of FTX. The sentencing comes after Ellison cooperated with prosecutors in the conviction of Sam Bankman-Fried, the founder of FTX and her former boyfriend.
Ellison, 29, faced charges including wire fraud and money laundering. As part of a plea deal, she admitted to her involvement in misusing customer funds but worked closely with authorities to build their case against Bankman-Fried, who is now serving a 25-year sentence for masterminding the fraud.
Judge Lewis Kaplan acknowledged Ellison’s “extraordinary” cooperation, but emphasized her significant role in one of the largest financial frauds in U.S. history. Ellison also must forfeit over $11 billion. Despite facing a potential 110-year sentence, her cooperation and expression of remorse were key factors in the lenient two-year sentence.
In court, Ellison apologized to the victims, saying, “On some level, my brain can’t even comprehend the scale of harm I caused.” She tearfully testified against Bankman-Fried, revealing details of how FTX customer funds were secretly used for lavish investments and personal expenses.
FTX was once valued at $32 billion before its collapse in 2022. The revelations of its financial misconduct shook the cryptocurrency industry, leading to several high-profile convictions, including FTX co-CEO Ryan Salame, who was sentenced to 90 months for related offenses.
Ellison’s sentence is seen as an indicator of what may come for other key players in the FTX scandal, including co-founder Gary Wang and former engineering chief Nishad Singh, whose sentencing is expected in the coming months.
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