Caroline Ellison Sentenced to 2 Years in Prison

• Caroline Ellison sentenced to 2 years for fraud in Alameda/FTX $8B fund misuse.
• Ellison’s actions, influenced by Bankman-Fried, helps her reduce her sentence.
• Judge imposed a 2-year sentence, rejecting probation, plus $11B fine for financial fraud.

Caroline Ellison, the former CEO of Alameda Research, received a two-year prison sentence for her part in the collapse of the FTX cryptocurrency exchange. Ellison’s sentencing, which took place in a New York federal court, follows her guilty plea to fraud and conspiracy charges related to the FTX fraud that cost customers billions in lost funds.

Ellison, who headed Alameda Research, participated in the misappropriation of customer funds. Alameda received approximately $8 billion taken from FTX accounts under the direction of Sam Bankman-Fried. These funds were then used for Alameda’s trading operations and other purposes, resulting in huge losses for customers and investors.

Read also: Justice Served? Caroline Ellison’s Role in the FTX Scandal and Her Sentence

Ellison’s Actions Influenced by Bankman-Fried

Assistant U.S. Attorney Danielle Sassoon argued that while Ellison was responsible, her actions stemmed from the influence of her former boss. Sassoon compared Ellison’s behavior with that of Bankman-Fried, who appeared unremorseful and posed a greater risk of re-offending.

Ellison’s attorney, Anjan Sahni, portrayed her as being under the influence of Bankman-Fried, both professionally and personally. Sahni stated that Ellison’s involvement in the illegal activities at Alameda was driven by her desire to meet Bankman-Fried’s expectations.

Read also: Blame Drama: Caroline Ellison Says ‘Sam Was the One’ Who Ruined FTX

Judge’s Remarks and Sentencing

U.S. District Judge Lewis Kaplan, who presided over both Bankman-Fried’s and Ellison’s cases, echoed these sentiments during the sentencing. While acknowledging Ellison’s guilt, Kaplan cited her extensive cooperation with prosecutors as a factor in reducing her sentence. Kaplan also mentioned Bankman-Fried’s influence over Ellison, describing him as having her “kryptonite.”

Ellison’s sentence was harsher than the Probation Department’s recommendation of monitored release without prison time. She was ordered to pay $11 billion in restitution in addition to her two-year prison sentence. The case, which involved the collapse of a $32 billion company, ranks as one of the largest financial frauds in U.S. history.