For Her Part In The FTX Scam, Caroline Ellison Received A Two-year Prison Sentence

NEW YORK: Alameda Research’s former CEO, Caroline Ellison, received a 24-month prison sentence for her involvement in the FTX collapse. She also had to give up $11 billion. In December 2022, Ellison entered a guilty plea to two charges of wire fraud & five counts of conspiracy as a condition of entering into a cooperation arrangement with the government. A light sentence was suggested by the prosecution due to Ellison’s “extraordinary” and “very timely” cooperation. Both her own attorneys and the federal Probation Department requested no jail time.

She Was Accountable For Her Part In The Scam

Thirty years is a long time to see cooperators. According to Bloomberg, Judge Lewis Kaplan remarked, “I’ve never encountered one quite like Ms. Ellison,” during the sentence hearing. Her testimony was “very incriminating of herself,” but unlike Sam Bankman-Fried, it was devoid of any glaring contradictions. Kaplan argued that she was nevertheless accountable for her part in the scam. Sam Bankman-Fried, FTX cofounder, was tried and Ellison was the main witness. She gave three days of testimony in this case.

Ellison’s early admission of guilt allowed for the prompt indictment of her ex-boyfriend Bankman-Fried, “ensuring that neither did he flee the Bahamas nor further obstruct the government’s investigation,” according to a statement provided by the prosecution before Ellison’s sentencing. Additionally, Ellison was entirely and promptly forthright in his contacts with the government, according to the document. According to a statement produced by Ray and provided by the defense, Ellison was also quick to help the new CEO, John J. Ray, tasked with clearing up the FTX problem, locate and retrieve customer assets. He said that her “early cooperation” was “valuable” in helping the debtors regain their assets.

Ellison Was The Sole Accomplice Without Equity In FTX

According to an agreement under negotiation, Ellison will provide the FTX debtors with “substantially all of her assets that remain after fulfilling her forfeiture obligations.” Unlike Bankman-Fried, Ellison seemed to sincerely regret her part in the scam. We are aware of this not only owing to her cooperation agreement but also because she told her staff members she was sorry and confessed during a meeting that was secretly recorded. Not only did the taped confession cement Bankman-Fried’s fate, but it also showed how repentant she was.

In addition to Ellison’s candor, there were a few additional mitigating factors. Prosecutors stated that Ellison was the sole accomplice without equity in FTX or Alameda, adding that “the government found no proof that Ellison cherished and enjoyed the wealth created by the fraud.” Ellison has already endured severe fallout. Her psychiatrist conducted an interview with Michael Lewis for his own book Going Infinite, and excerpts from her diaries have appeared in numerous sections of The New York Times. “The government can’t decide about any additional cooperating witness during the recent past who has faced a greater level of focus and harassment,” the prosecution noted, confirming this claim.