A US district court judge sentenced Caroline Ellison, the former advisor and ex-girlfriend to the convicted crypto fraudster and FTX founder Sam Bankman-Fried, to two years in prison.
The New York Times reported Ellison’s sentence for her role in the $8 billion in fraud committed by the FTX crypto exchange that sent Bankman-Fried to federal prison for 25 years back in March. Ellison will also have to serve three years of supervised release once she’s finished her prison sentence.
Ellison pled guilty at the end of 2022 to seven counts of fraud just as Bankman-Fried was being extradited to the US from the Bahamas. US Securities and Exchange Commission (SEC) Director of Enforcement Sanjay Wadhwa said following Ellison’s plea that she and Wang “were active participants in a scheme to conceal material information from FTX investors.”
Ellison was also the former chief executive officer of FTX’s sister company Alameda Research. Prosecutors said she diverted FTX customers’ funds onto Alameda’s books to hide risks from their clients. Ellison testified against Bankman-Fried, making her a key witness in his criminal fraud trial.
Prosecutors also got Bankman-Friend’s house arrest and bail revoked when a judge determined the FTX founder tried to hinder Ellison’s testimony last year. Bankman-Fried tried to message FTX’s general counsel on Signal and email in 2023 to influence Ellison’s testimony who was only identified as “Witness-1.”
Nine months later, Bankman-Fried showed a New York Times reporter personal writings from Ellison that prosecutors said were an attempt to damage her reputation especially amongst prospective jurors. The judge agreed both instances merited Bankman-Fried’s arrest and jailing while he awaited trial. Bankman-Fried is currently serving his 25-year sentence in a federal prison in Brooklyn awaiting appeal for his conviction.
Ellison issued a statement before her sentence apologizing for her crimes to the people she and her former firm defrauded. Prosecutors did not issue a recommended sentence and characterized her cooperation with investigators as “exemplary” in a memo to the judge.
“Not a day goes by that I don’t think of the people I hurt,” Ellison said in court. “I am deeply ashamed of what I have done.”
