Caroline Ellison Sentenced to 2 Years in FTX Fraud Case

Caroline Ellison received a two-year prison sentence on Tuesday for her role in the FTX fraud scandal.

The 30-year-old was also required to forfeit $11 billion, which she accrued through her involvement with the now-defunct cryptocurrency exchange.

Ellison’s Cooperation

Judge Lewis A. Kaplan, who oversaw the proceedings, recognized the former CEO of Alameda Research for her collaboration with the prosecution, stating, “I’ve never seen a cooperator quite like Miss Ellison.” Nonetheless, Kaplan pointed out that the extent of the FTX fraud precluded her from evading imprisonment, declaring, “Cooperation isn’t a ‘get out of jail free’ card in a case of this magnitude.”

Her sentence includes three years of supervised release following her prison term, which may be served in a minimum-security facility near Boston. As this is a federal offense, she must serve at least 75% of her sentence before being eligible for parole.

Prosecutors characterized Ellison’s testimony as vital to the conviction of Bankman-Fried, labeling it the “cornerstone” of the case in a memo prior to Tuesday’s hearing. Assistant U.S. Attorney Danielle Sassoon also emphasized this, contrasting her expression of remorse with Bankman-Fried’s lack of accountability.

Her legal representatives contended that her “extraordinary cooperation” and minimal risk of reoffending warranted a more lenient sentence. Previously, her legal team and the probation department had suggested time served along with three years of probation.

Her attorney, Anjan Sahni, claimed that Ellison had been manipulated by SBF, with whom she had a previous romantic relationship, stating she had since “recovered her moral compass.” Judge Kaplan remarked, “You were vulnerable, and you were exploited.”

SBF’s Request for New Trial

In the meantime, the founder of FTX is pursuing a new trial with a different judge, alleging bias in his earlier case. His legal team has filed an appeal, claiming that Judge Kaplan exhibited a prejudiced stance that influenced the outcome of the trial.

Moreover, a group of medical professionals submitted a brief in support of his appeal, referencing his neurodivergent conditions, such as autism spectrum disorder (ASD) and ADHD. They contended that his conditions, combined with the lack of necessary medication during the trial, hindered his effective communication and contributed to his conviction.

Before the sentencing, Ellison expressed her remorse, offering apologies to FTX’s former customers, her family, and colleagues. “The human brain struggles to grasp large figures,” she stated. “I can hardly begin to fathom the suffering I’ve caused.”

She concluded, “If you had told me back in 2018 that I would end up pleading guilty to fraud, I would have said you were crazy… At each step of the process, it became increasingly difficult to extricate myself…I regret not being more courageous.”