Court Sentences FTX/Alameda Exec Caroline Ellison to 24 Months in Prison

U.S. District Judge Lewis Kaplan sentences Caroline Ellison, a former Alameda Research executive FTX founder SBF’s ally, to two years in prison, ordering her to forfeit $11 billion. 

The judge issued the ruling yesterday at 3:00 PM (EDT) in a federal courthouse in Manhattan. Notably, the declaration serves as punishment for Ellison’s involvement in the massive fraud that led to the devastating collapse of the FTX exchange, which was previously valued at $32 billion. 

Judge Ignores Recommendation of No Jail Term  

Prior to the verdict, the federal Probation Department and Ellison’s counsel had asked Judge Kaplan not to sentence the former Alameda Research executive to prison. Instead, the former recommended that the federal judge sentence her to three years of supervised release, citing her extensive cooperation with authorities. 

It should be recalled that Ellison was instrumental in the conviction of her former boyfriend, Sam Bankman-Fried (SBF). Ellison, who was the star witness in SBF’s prosecution, claimed that the FTX founder instructed her to commit fraud. As a result, he was given a 25-year jail term and ordered to forfeit $11 billion. 

Despite Ellison’s cooperation with authorities and recommendation from the Probation Department, Judge Kaplan sentenced her to two years in prison.

The judge commended her for cooperating with the authorities. However, he disclosed that the two-year prison sentence is necessary to deter other bad actors from perpetrating similar crimes in the future. 

Kaplan characterized the FTX case as the biggest financial fraud ever recorded in the United States, emphasizing that he could not agree to a “get-out-of-jail-free” card. 

Ellison Apologizes for Her Wrongdoings 

With tears running down her cheeks and in the presence of her family members, Ellison apologized to the victims of the FTX debacle. 

Reading from a statement, the former Alameda Research executive expressed deep shame and apologized for not having the courage to leave SBF and the company before things got bad. 

Reacting, Judge Kaplan believed that Ellison was truly remorseful for the crimes she committed. In the meantime, Ellison will remain free on bail until November 7, when she will officially surrender herself to prison. 

Court Schedules Sentencing Hearing for 2 Other FTX Executives 

Ellison is the third individual linked to the FTX debacle to receive a prison sentence. The other two execs include SBF and Ryan Salame, who were sentenced to 25 years and 7.5 years jail terms, respectively. 

The Manhattan federal court has also scheduled the sentencing hearing of two other FTX executives, Nishad Singh and Gary Wang, for later this year. 

While Singh’s sentencing hearing will be held on October 30, Wang’s case is scheduled for November 20.