Caroline Ellison, the cryptocurrency executive who helped her ex-boyfriend Sam Bankman-Fried steal $8 billion in customer funds, was sentenced to two years in prison on Tuesday and made to forfeit $11 billion for her role in the fraud.
Ellison, who ran the hedge fund tied to the digital currency trading platform FTX, pleaded guilty to seven counts of fraud and conspiracy.
The relatively light sentence—as Ellison’s charges carried a maximum sentence of 110 years—comes after she testified against Bankman-Fried, who was sentenced to 25 years in prison for the fraud that led to FTX’s sudden collapse in Nov. 2022.
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Before sentencing, prosecutors had urged U.S. District Judge Lewis Kaplan to hand down a lenient sentence for Ellison, citing her “extraordinary cooperation” in the case against her boss and former boyfriend.
Attorneys for Ellison, who has been out on bail since Dec. 2022, had asked for no prison time at all.
Ellison told the court Tuesday that it was a “relief” to fully cooperate with prosecutors and delivered an apology for her actions.
“I participated in a criminal conspiracy that ultimately stole billions of dollars from people who entrusted their money with us,” she said. “On some level, my brain doesn't even comprehend all the people I harmed... That doesn’t mean I don’t try.”
FTX Founder Sam Bankman-Fried.
AnadoluJudge Kaplan said Ellison’s cooperation had been “remarkable” but that a “get out of jail free card” was not an option.
“I’ve seen a lot of cooperators in 30 years. I’ve never seen one quite like Ms. Ellison,” Kaplan said at the sentencing hearing.
“You’re a very strong person, Ms. Ellison, in some ways, but not inviolable,” he said. “Mr. Bankman-Fried had your Kryptonite.” He added that she was “vulnerable and exploited.”
In her testimony against Bankman-Fried, Ellison painted him as the mastermind behind one of the largest financial crimes in history. She said that her misdeeds as chief executive of Alameda Research, the hedge fund founded by Bankman-Fried, happened under his guidance.
“When I started working at Alameda, I don’t think I would have believed it if you told me that a few years later I would be sending false balance sheets to our lenders or taking customer money,” she said in court last year. “But over time it was something that I became more comfortable with when I was working there.”
Bankman-Fried was convicted of defrauding his investors out of $1.7 billion and his hedge fund’s lenders out of $1.3 billion, in addition to stealing $8 billion from FTX customers.
Although Ellison maintained she was not aware of the full extent of the fraud, both the prosecution and defense agreed that she knowingly participated in some of Bankman-Fried’s crimes.
The pair’s romantic relationship ended before FTX’s collapse.
