Caroline Ellison, the former girlfriend of convicted cryptocurrency fraudster Sam Bankman-Fried, received a two-year prison sentence for her involvement in the fraudulent activities that contributed to the downfall of FTX.
Ellison, who had pleaded guilty to charges of fraud and money laundering, played a crucial role as the prosecution’s key witness during Bankman-Fried’s trial. Previously, she served as CEO of Alameda Research, a company associated with FTX, which misused billions of dollars in customer deposits from the cryptocurrency exchange.
In her statement at the sentencing on September 24, Ellison expressed deep remorse, saying, “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.”
Having been free on bail since December 2022, Ellison’s attorneys sought to avoid prison time for her, and prosecutors acknowledged her significant cooperation, referring to it as “not only substantial, but exemplary.” However, Judge Lewis Kaplan imposed the sentence, stating that her genuine remorse and assistance should not act as a “get out of jail free card.” After serving two years, Ellison will also be subjected to three years of supervised release.
Ellison was among three senior FTX executives and associates to enter into plea agreements following the company’s collapse in November 2022. Once ranked as the third-largest crypto exchange in the world, FTX collapsed imminently after leaked balance sheets related to Alameda Research sparked accusations that Bankman-Fried misappropriated customer investments to settle debts and make unauthorized investments.
During Bankman-Fried’s trial, Ellison revealed shocking evidence, including allegations that he and others bribed a Chinese official with $100 million to release $1 billion worth of funds belonging to Alameda that were held by a China-based cryptocurrency exchange. She also noted that in the fall of 2022, shortly before FTX’s collapse, Bankman-Fried attempted to secure funding by offering shares of FTX to Saudi Prince Mohammed bin Salman, which would have also helped mask the alleged fraud.
Reflecting on her relationship with Bankman-Fried, Ellison described feelings of being an “unequal partner.” The trial was marred by Bankman-Fried’s reported attempts to intimidate her, including having his bail revoked after leaking her personal writings about their relationship to The New York Times. Prosecutors argued that he displayed intimidation through gestures and laughter during her testimony.
Bankman-Fried was found guilty and sentenced to 25 years in prison. He has spent the past year in a Brooklyn jail while his legal team prepared an appeal, which was submitted earlier this month. Reports indicate that he is currently sharing a cell with Sean Combs.