Caroline Ellison, CEO of Alameda Research, sister institution of the defunct exchange FTX, was sentenced to two years in prison last Tuesday (9/24) for participating in financial crimes with her ex-boyfriend SBF. Although Ellison cooperated vigorously with prosecutors, legal experts were surprised by her sentencing, having predicted she might avoid jail altogether.

Judge imposes 24-month sentence

New York federal judge Lewis Kaplan sentenced Ellison, 29, to 24 months in prison, according to Bloomberg. In December 2022, Ellison pleaded guilty to multiple charges, including wire fraud and conspiracy to commit money laundering, similar to charges faced by SBF. Although Ellison is required to serve her sentence, she has the option of serving it in a minimum security prison.

The judge spoke highly of Ellison's cooperation as a witness, saying he had "never seen" such a cooperating witness. However, the judge described SBF as Ellison's "Achilles' heel" (Kryptonite, the alien mineral most feared by Superman in the comics). SBF pleaded not guilty to the charges and was sentenced to 25 years in prison at a criminal trial in March.

Many legal experts believe Ellison may avoid jail time altogether because of her cooperation. Last week, prosecutors expressed support for a lighter sentence but gave no specific recommendations. Ellison's lawyers advocated for her to be sentenced to three years of foreign service in lieu of prison time.

After Alameda and FTX collapse: Breathe a sigh of relief

Ellison served as CEO of Alameda Research, a crypto hedge fund associated with FTX. Alameda's collapse involved the loss of FTX client funds, ultimately leading to the bankruptcy of both companies and the arrests of key executives, including Ellison and SBF. Ellison expressed remorse for her role in court, saying, "I participated in a criminal conspiracy that ultimately stole billions of dollars from those who trusted us and entrusted us with their money." She also said, It was a "relief" for her to fully cooperate with the investigation.

Looking back on her career before her career crash, Ellison had this advice for her younger self as she applied for the 2021 Forbes 30 Under 30 list:

I would tell her to be less risk-averse and believe in herself more.

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