Former Alameda CEO Will Now Serve 2-Year Sentence

Key Points:

• Former Alameda CEO Caroline Ellison reported to a Connecticut federal prison on November 7 after being sentenced to two years for her role in the FTX fraud.
• Ellison pleaded guilty to multiple charges, including wire fraud and money laundering, and cooperated with prosecutors.

According to CNBC, Caroline Ellison, the former CEO of Alameda Research, on Nov. 7 reported to a federal prison in Connecticut to begin serving her sentence for her role in a multibillion-dollar fraud conducted by the now-defunct cryptocurrency exchange FTX.

Read more: Former Alameda Research CEO Very Cooperative During Trial Involved in FTX 

Former Alameda CEO Reports to Prison for FTX Fraud

Ellison, whose testimony was key in bringing the case against FTX founder Sam Bankman-Fried, was sentenced in September to two years in prison and ordered to forfeit $11 billion.

The former Alameda CEO, as part of a deal with prosecutors, pleaded guilty to conspiracy and financial fraud charges stemming from the implosion of FTX. She faced counts of wire fraud, commodities fraud, securities fraud, and money laundering for misusing user funds between FTX and Alameda in connection with the bankruptcy of FTX in 2022 after once having a valuation of $32 billion.

The sentencing for Ellison came after a recommendation by the federal Probation Department for three years of supervised release with no time in prison. However, Judge Lewis Kaplan ruled that a stiff sentence was needed as deterrence to future financial fraud, apart from Ellison’s cooperation with authorities in helping secure the conviction of Bankman-Fried.

Ellison’s Cooperation Leads to Conviction of FTX Founder Bankman-Fried

Joining former FTX Digital Markets co-CEO Ryan Salame, who in January pleaded guilty, and Nishad Singh, FTX’s former engineering director, who in October was sentenced to time served, Ellison marks the third named in FTX’s indictment to report into prison.

The former Alameda CEO also had a romantic relationship with Bankman-Fried. Through her firm, Ellison played a central role in the scandal involving the misappropriation of billions of dollars in customer money by FTX. The case also represents one of the most significant financial frauds ever committed in the United States.