Caroline Ellison, once a key figure in the collapse of FTX, has been sentenced to two years in prison and ordered to forfeit $11 billion for her involvement in one of the biggest financial frauds in U.S. history. The former head of Alameda Research played a central role in the fraud orchestrated by her ex-boyfriend, Sam Bankman-Fried, who looted $8 billion in customer funds from the crypto exchange. Despite a recommendation for supervised release, Judge Lewis Kaplan opted for prison time, emphasizing the need to deter future fraudsters.
Ellison's cooperation with authorities was instrumental in convicting Bankman-Fried, who is now serving 25 years. While visibly emotional in court, she expressed deep regret for her actions and failing to leave the FTX orbit sooner. Her cooperation with prosecutors included providing critical evidence, like fabricated spreadsheets, which helped seal Bankman-Fried's fate.
Kaplan highlighted the complexity and magnitude of the case, calling it the largest financial fraud the U.S. has ever seen. Ellison, though spared a lengthier sentence due to her assistance, still faces significant financial penalties, including the forfeiture of $10 million in shares from the AI startup Anthropic. Her sentencing marks a pivotal moment in the ongoing FTX scandal, with more executives like Gary Wang and Nishad Singh awaiting their own fates later this year.
While Ellison’s sentencing closes one chapter, the ripples of FTX’s downfall continue to affect the crypto world.
