Caroline Ellison, a former top executive at Sam Bankman-Fried’s FTX cryptocurrency exchange, was sentenced Tuesday to 24 months for her role in a multibillion-dollar fraud involving the bankrupt company.
Ellison, 29, pleaded guilty nearly two years ago and testified against Bankman-Fried for nearly three days at his trial on multiple fraud charges last November. In her emotional testimony, she blamed Bankman-Fried for justifying FTX’s illegal conduct and said she had felt relief when the company collapsed because she “didn’t have to lie anymore.”
Ellison can serve the sentence at a minimum-security facility, Judge Lewis A. Kaplan said at the sentencing, according to Bloomberg News, which also reported she’ll have to forfeit $11 billion.
Ellison was chief executive at Alameda Research, a cryptocurrency hedge fund controlled by Bankman-Fried that was used to process FTX customer funds. In her testimony, she disclosed that she altered balance sheets to try to hide that Alameda was borrowing about $10 billion from FTX customers in June 2022, when the crypto market was plummeting and some lenders were demanding that Alameda return their money.
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Prior to FTX’s collapse, Bankman-Fried had became a billionaire through cryptocurrencies, earning a Fortune magazine cover that asked if he was the next Warren Buffett. But after FTX collapsed into bankruptcy, a jury concluded that some of FTX investors’ money had been improperly spent on real estate, investments, celebrity endorsements, political contributions and lavish lifestyles.
In asking the court leniency, Ellison’s own lawyers cited both her testimony and the trauma of her off-and-on romantic relationship with Bankman-Fried, though they also stressed that she wasn’t trying to evade responsibility for her crimes.
In handing down her sentence, Judge Kaplan said he was allowed to show leniency to defendants who provide “substantial assistance to the government,” according to Bloomberg News. He also praised Ellison, and described her as “vulnerable” and “exploited.”
“Caroline blames no one but herself for what she did,” her lawyers wrote in a court filing. “She regrets her role deeply and will carry shame and remorse to her grave.”
Bankman-Fried is serving a 25-year sentence after he was sentenced in March in what a prosecutor once described as one of the largest financial frauds in U.S. history.
—With reporting by the Associated Press.
