A US federal judge in the Southern District of New York has sentenced Caroline Ellison, a member of the executives who presided over the fraud that led to the collapse of crypto exchange FTX, to 2 years in prison.
Ellison entered the courtroom accompanied by her family, somber and quiet. The hour-long hearing was the culmination of a protracted downfall for the math whiz turned crypto executive. In the end, FTX founder Sam Bankman-Fried had been her “kryptonite.”
Ellison pleaded guilty to seven counts of fraud and conspiracy in connection with the fall of FTX in December 2022. She shared a tumultuous romantic relationship with Bankman-Fried, who was sentenced to 25 years in prison after being convicted of similar crimes at trial.
The exchange filed for bankruptcy in November 2022 after running dry of funds to process customer withdrawals. FTX insiders conducted an elaborate fraud whereby billions of dollars in customer funds were swept into a sibling company, Alameda Research, headed by Ellison.
Ellison faced a theoretical maximum sentence of 110 years in prison. Before receiving her sentence, Ellison told the court of her regret for having become embroiled in the FTX fraud and the damage she had caused to customers. The judge signaled his intent to show Ellison leniency but stated that she must spend time behind bars.
Judge Lewis Kaplan stated that for a case this serious, he couldn’t give out “a literal get-out-of-jail-free card.” Ellison’s sentence is a result of her actions and her complicated relationship with Bankman-Fried.