Caroline Ellison, the former CEO of Alameda Research LLC, appeared in New York federal court on September 24, 2024. Michael Nagle of Bloomberg provided an image of her arrival at court. Ellison, a key witness in the case against her former boyfriend, FTX founder Sam Bankman-Fried, received a two-year prison sentence and was ordered to forfeit $11 billion. Her involvement was related to the significant fraud and conspiracy that led to the downfall of the cryptocurrency exchange, once valued at $32 billion.
The prison sentence issued by Judge Lewis Kaplan was considerably harsher than the federal Probation Department’s recommendation of three years of supervised release without incarceration. Defense attorneys had also sought a no-prison sentence for Ellison, who managed Alameda Research, a hedge fund associated with FTX.
Judge Kaplan acknowledged Ellison’s comprehensive cooperation with prosecutors, which was instrumental in Bankman-Fried’s conviction; however, he emphasized the need for her sentence to serve as a deterrent against potential future misconduct. Kaplan stated, “A literal get-out-of-jail-free card I can’t agree to,” during the proceedings at U.S. District Court in Manhattan. He also remarked on Ellison’s sincere remorse and the emotional toll her cooperation entailed.
Ellison reached a plea agreement with prosecutors in December 2022, a month after FTX declared bankruptcy. She pleaded guilty to conspiracy and financial fraud charges. In contrast, Bankman-Fried opted for a trial and was convicted on all seven criminal fraud charges in the same courthouse where Ellison was sentenced. In March, Bankman-Fried was sentenced to 25 years in prison and ordered to forfeit $11 billion.
Bankman-Fried has since appealed his conviction, seeking a new trial and a different judge, alleging bias from Judge Kaplan. On late Monday, Ellison’s attorneys filed that they had finalized financial settlements with prosecutors and the FTX debtor’s estate.
Both Ellison and Bankman-Fried faced a potential maximum sentence of approximately 110 years in prison. However, defendants in criminal cases who cooperate with prosecutors, especially in white-collar crimes such as this, often receive reduced sentences.
This story is ongoing and will be updated with further developments.
