Caroline Ellison, a top executive of Alameda Research, the FTX group’s trading arm, has been sentenced to two years in prison over her involvement in the collapse of FTX and related financial frauds.
Ellison was a co-CEO of Alameda Research and chief lieutenant to Sam Bankman-Fried (commonly known as SBF). Earlier this year, SBF received a 25-year prison sentence for stealing over USD$8 billion from customers of the exchange in order cover trading losses at Alameda and other investments.
Ellison struck a plea deal with the prosecutor by admitting to charges including wire fraud and money laundering, and testified against SBF. She was also ordered to forfeit more than USD$11 billion to the court, with the possibility of additional restitution payments.
Ellison was facing a potential maximum sentence of 110 years in prison, which is 55 times longer than the sentence she received.
Judge Kaplan described her cooperation with prosecutors as "remarkable" but emphasized that her significant culpability and remorse for the crimes should not serve as a "get out of jail free card," according to Reuters.
In court, Ellison expressed her apologies to the victims of the scheme, as reported by US media. She said:
On some level, my brain can't even comprehend the scale of the harm that I caused
FTX was founded in 2019 and quickly grew to become the third-largest crypto exchange globally, valued at USD$32 billion within just two years. The success of FTX turned SBF into a billionaire and a prominent business figure. However, in 2022, rumours of financial woes led to a run on its deposits, triggering the firm's collapse and ensuring a prolonged crypto winter. SBF and his associates immediately fell under investigation with SBF convicted by a New York jury last year on charges including wire fraud and conspiracy to commit money laundering, following a trial that detailed his misuse of customers' funds for property purchases, investments, and political donations. SBF is now appealing the sentence.
Written by J Huang and S Pettigrove
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