Former Alameda CEO Caroline Ellison gets 24-month jail term

Caroline Ellison, former CEO of Alameda Research, was sentenced to 24 months in prison for her involvement in the FTX fraud case.

In addition to her prison sentence, Ellison will have to forfeit approximately $11 billion, as ruled by the federal judge.

She will serve her sentence at a minimum-security facility near Boston and will spend three years on supervised release after her term.

Despite her sentence, Judge Lewis A. Kaplan expressed sympathy toward Ellison, citing her cooperation and remorse during the trial.

Kaplan acknowledged Ellison’s vulnerability and exploitation but emphasised the severity of the FTX fraud, stating that cooperation alone could not eliminate a prison sentence.

Ellison will be required to serve at least 75% of her sentence before being eligible for parole, as the case is federal.

Her testimony against FTX founder Sam Bankman-Fried was crucial in his conviction, with prosecutors calling her testimony the "cornerstone" of the case.

Bankman-Fried, who was also Ellison’s former boyfriend, was convicted on all seven counts of fraud and conspiracy and sentenced to 25 years in prison, though he is appealing the conviction.

Prosecutors highlighted the contrast between Ellison and Bankman-Fried, noting Ellison’s remorse and proactive cooperation with the Department of Justice.

Unlike Bankman-Fried, who showed no remorse, Ellison admitted to her role in the scheme and expressed deep regret for her actions.

Ellison’s attorneys argued for a more lenient sentence, citing her "extraordinary cooperation" and low risk of recidivism, recommending time served plus probation.

Her lawyer, Anjan Sahni, argued that Ellison had been manipulated by Bankman-Fried and acted out of a desire to please him, though she has since "recovered her moral compass."

Before her sentencing, Ellison apologised to FTX and Alameda's former customers, colleagues, friends, and family, acknowledging the harm caused.

Ellison will voluntarily surrender to the Bureau of Prisons in approximately 45 days to begin serving her sentence.

Ellison expressed disbelief at her situation, saying, "If you had told me back in 2018 that I would end up pleading guilty to fraud, I would have told you you were crazy."