Coinspeaker Former Alameda Research CEO Caroline Ellison Gets Two Years in Prison for Her Role in FTX Collapse
Caroline Ellison, the former CEO of the crypto hedge fund Alameda Research, has been sentenced to two years in prison for her role in the massive fraud scheme that led to the downfall of the crypto exchange FTX. The ruling was delivered by Judge Lewis Kaplan in a New York federal court on Tuesday, nearly two years after the scandal shook the market and caused a seismic shift in the industry.
In his ruling, Judge Kaplan made it clear that despite Ellison’s cooperation with authorities and her pivotal testimony against Sam Bankman-Fried (SBF), the founder of FTX and her former boyfriend, she had to be held accountable for her actions.
From CEO to Key Witness
Ellison, who had been at the helm of Alameda Research until FTX’s dramatic collapse in November 2022, entered a plea deal with US prosecutors, pleading guilty to a number of charges including wire fraud and conspiracy to commit securities fraud.
She admitted her involvement in the scheme that defrauded investors and contributed to one of the largest financial failures in US history. As part of the deal, Ellison stood as a key witness during the criminal trial of SBF. Her testimony was crucial in securing a conviction against Bankman-Fried, who was sentenced to 25 years in prison earlier this year.
As a reward for her cooperation with the prosecutors, the federal Probation Department recommended Judge Kaplan to be lenient in his ruling. They suggested the judge sentence Ellison to three years with supervised release, with no prison time.
Her defense lawyers also shared the same sentiment, citing her “profound regret” and efforts to make amends. The attorneys argued that she had turned her life around and had expressed genuine remorse.
A Harsh Reality
However, Judge Kaplan dismissed these arguments, slapping Ellison with 24 months prison time. She was also ordered to forfeit a staggering $11 billion as part of her sentence.
“I’ve seen a lot of cooperators over the years and I’ve never seen one quite like Miss Ellison. However, a literal get-out-of-jail-free card I can’t agree to,” said Judge Kaplan.
The judge also said that while he believes Ellison is remorseful for her role in defrauding customers, she cannot be allowed to go free. He believes her sentencing will serve as a deterrent to other bad actors.
Judge Kaplan has ruled Ellison will remain free on bail until she surrenders to begin her prison sentence on or after November 7. While giving her sentencing statement, Ellison apologized to victims of the fraud, saying she was deeply ashamed of her actions and apologizing for not stepping away from both FTX and Bankman-Fried when she should have.
Meanwhile, her sentencing marks the end of a turbulent chapter in the FTX saga as most of the conspirators who contributed or benefited from the fraud have been brought to book.
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Former Alameda Research CEO Caroline Ellison Gets Two Years in Prison for Her Role in FTX Collapse
