Former CEO of Alameda Research Caroline Ellison, who is also the ex-partner of disgraced FTX co-founder Sam Bankman-Fried, has been sentenced to two years in prison for her involvement in one of the largest financial frauds in US history.
Crypto exchange collapse
The case involved the collapse of cryptocurrency exchange FTX, which imploded in November 2022 following revelations about its financial practices and ties to Alameda.
Ellison’s sentencing comes despite her pivotal role in the prosecution of Bankman-Fried, who was convicted of defrauding FTX customers of over $8 billion.
While Ellison faced similar charges to Bankman-Fried, including fraud and conspiracy, her cooperation with prosecutors was key in reducing her sentence.
She provided substantial assistance in the case, including incriminating herself during testimony and outlining how Bankman-Fried directed the fraudulent activities at FTX and Alameda.
Emotional account
Ellison’s testimony, which spanned three days, detailed how she and other executives, under Bankman-Fried’s leadership, deceived investors and customers.
Her insights, drawn from her personal diary and professional experience, offered the jury an emotional account of the internal operations at Alameda and FTX, painting Bankman-Fried as the mastermind behind the scheme.
The sentencing follows the recent conviction of Bankman-Fried, who was sentenced to 25 years in prison.
Other FTX executives, including Nishad Singh and Gary Wang, who also cooperated with prosecutors, are awaiting sentencing, while Ryan Salame, another former executive, has already received a seven-year sentence.
Despite Ellison’s cooperation, Judge Lewis Kaplan emphasised that the severity of the fraud warranted a prison term, underscoring the enormous losses suffered by investors and customers alike.