BREAKING: Caroline Ellison Sentenced to 2 Years for Role in FTX Collapse

Caroline Ellison, former head of Alameda Research, has been sentenced to two years in prison for her involvement in the downfall of FTX, and is also required to forfeit $11 billion.

In December 2022, she admitted guilt to wire fraud and conspiracy charges as part of a deal with the government, which prompted a recommendation for a lighter sentence due to her swift and extensive cooperation. Both her defense team and the Probation Department had requested no prison time.

During her sentencing, Judge Lewis Kaplan remarked on her exceptional cooperation, contrasting her with Sam Bankman-Fried. Unlike him, Ellison’s testimony was consistent and self-incriminating. Kaplan emphasized that, despite her cooperation, she still bore responsibility for her role in the fraud.

Ellison played a critical role in Bankman-Fried’s trial, testifying for several days. Prosecutors highlighted how her quick confession helped bring charges against him before he could evade authorities, noting her complete openness during their meetings. Additionally, she assisted the new FTX CEO, John J. Ray, in recovering assets for creditors. Her efforts were described as invaluable in tracking down customer funds.

Beyond her legal consequences, Ellison expressed deep regret for her actions, both in her formal cooperation and in a private apology to her staff, which was later made public. Prosecutors also noted her lack of personal financial benefit from the fraud, as she held no stake in FTX or Alameda, and there was no evidence she gained from the scheme.

The fallout for Ellison has been severe. Her private journals were made public, and her psychiatrist discussed her in an interview for Michael Lewis’ book Going Infinite. She has faced widespread criticism, particularly from the crypto community, and has struggled to find employment or feel safe in public. Prosecutors acknowledged the unusual level of scrutiny and harassment she has endured as a cooperating witness.