Caroline Ellison, the former partner of convicted crypto fraudster Sam Bankman-Fried, received a two-year prison sentence for her involvement in the fraud that ultimately led to the downfall of FTX.
Ellison had pleaded guilty to charges of money laundering and fraud and served as the key witness for the prosecution during Bankman-Fried’s trial. As the CEO of Alameda Research, a company affiliated with FTX, Ellison was implicated in misappropriating billions of dollars in customer funds from the cryptocurrency exchange.
At her sentencing hearing on September 24, Ellison expressed deep remorse, stating, “To all the victims and everyone I harmed directly and indirectly, I am so, so sorry. I can’t even imagine the pain I caused.”
Since December 2022, she had been on bail while her attorneys fought to keep her out of prison. Although prosecutors cited her cooperation as “not only substantial, but exemplary,” they did not recommend a specific sentence. Nevertheless, Judge Lewis Kaplan imposed the two-year sentence, emphasizing that her genuine remorse and cooperation should not be seen as a means to evade punishment. After serving her time, Ellison will also face three years of supervised release.
Ellison was one of three key executives from FTX who entered plea deals following the exchange’s collapse in November 2022. FTX, once the third-largest cryptocurrency exchange globally, crumbled after the revelation of concerning balance sheets from Alameda Research. These disclosures led to accusations against Bankman-Fried of using customer investments to settle debts and make undisclosed side investments.
During her testimony at Bankman-Fried’s trial, Ellison revealed shocking details, including an allegation that he and others bribed a Chinese official with $100 million to unfreeze $1 billion of Alameda funds trapped in a Chinese cryptocurrency exchange. She also recounted Bankman-Fried’s attempts to raise money shortly before FTX’s failure, including an effort to sell shares to Saudi Prince Mohammed bin Salman.
Ellison discussed her feelings of inequity in her relationship with Bankman-Fried, describing herself as an “unequal partner.” The trial also featured aspects of alleged intimidation from Bankman-Fried, who had his bail revoked after leaking her private writings to the press. Prosecutors claimed he attempted to intimidate her during her testimony by making scoffs and laughter in response.
Bankman-Fried was convicted and sentenced to 25 years in prison. He has been incarcerated in a Brooklyn jail as his legal team prepares an appeal filed earlier this month. Reports indicate he is sharing a cell with Sean Combs.