The former CEO of Alameda Research testified as a crucial prosecution witness against FTX founder Sam Bankman-Fried. Caroline Ellison, the former business partner and girlfriend of cryptocurrency thief Sam Bankman-Fried, has been sentenced to two years in prison for her role in one of the largest financial frauds ever.
Ellison, the CEO of Alameda Research and Bankman-Fried’s on-and-off girlfriend, was a significant prosecution witness in last year’s trial. The creator of the failed cryptocurrency exchange, FTX, was sentenced to 25 years in jail. Ellison pleaded guilty to seven charges, including fraud, immediately after FTX’s collapse in 2022, felonies punishable by up to 110 years in prison. However, the judge and the prosecutors agreed that Ellison deserved leniency for working with investigators and testifying against Bankman-Fried over three days during his trial.
On Tuesday, United States District Judge Lewis A Kaplan stated that Ellison’s assistance was “very substantial” but that a jail sentence was warranted despite her lawyers’ request for a non-custodial punishment considering the gravity of the crime. “There’s no way you’re ever going to do something like this again, I am persuaded,” Kaplan told him. “But here’s the thing: this was, if not the very greatest financial fraud ever perpetrated in this country or anywhere else, close to it.”
Kaplan stated that he would suggest Ellison be put in a minimum-security jail. During Bankman-Fried’s trial, Ellison testified that he directed her and others to use FTX clients’ funds to make riskier trades through sister company Alameda Research, purchase real estate, and make political contributions.
During his trial, bankman-Fried testified in his defense, accusing Ellison of being a poor manager and portraying himself as a well-meaning entrepreneur and altruist who was out of his element. Bankman-Fried filed an appeal earlier this month against his conviction on seven fraud and conspiracy charges, accusing the judge of preventing his legal team from presenting information that would have aided his defense.
