Judge: SBF's Ex Can't Avoid Prison Time

UPDATE Sep 24, 2024 3:33 PM CDT

Caroline Ellison was sentenced to two years in prison on Tuesday after she apologized repeatedly to everyone hurt by the FTX fraud. US District Judge Lewis A. Kaplan said Ellison's cooperation in the case was "very, very substantial" and praised her testimony. But he said a prison sentence was necessary because Ellison, a former top exec in Sam Bankman-Fried's cryptocurrency empire, had participated in what might be the "greatest financial fraud ever perpetrated in this country and probably anywhere else" or at least close to it. He said in such a serious case, he could not let cooperation be a get-out-of-jail-free card, the AP reports. She was ordered to report to prison Nov. 7.

Sep 24, 2024 6:21 AM CDT

Caroline Ellison, a former top executive in Sam Bankman-Fried's fallen FTX cryptocurrency empire, faces the possibility of years in prison when she's sentenced Tuesday for fraud, but prosecutors said she deserves leniency for her "extraordinary cooperation" as they investigated the company. Ellison, 29, pleaded guilty almost two years ago and testified against Bankman-Fried for nearly three days at a trial last November. In a court filing, prosecutors said her testimony was the "cornerstone of the trial" against Bankman-Fried, 32, who was found guilty of fraud and sentenced to 25 years in prison, per the AP.

• Asking the court for a lighter sentence, Ellison's own lawyers cited both her testimony at the trial 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. "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."

• FTX was one of the world's most popular cryptocurrency exchanges, known for its Super Bowl TV ad and its extensive lobbying campaign in Washington, before it collapsed in 2022. US prosecutors accused Bankman-Fried and other top execs of looting customer accounts on the exchange to make risky investments, make millions of dollars' worth of illegal political donations, bribe Chinese officials, and buy luxury real estate in the Caribbean.
• Ellison was chief executive at Alameda Research, a cryptocurrency hedge fund controlled by Bankman-Fried that was used to process some customer funds from FTX. Her work relationship with Bankman-Fried was complicated by her romantic feelings for him, her lawyers wrote in a court filing. "From the start, Mr. Bankman-Fried's behavior was erratic and manipulative," her lawyers said. "He initially professed strong feelings for Caroline and suggested their liaison would develop into a full relationship. But after a few weeks, he would 'ghost' Caroline without explanation, avoiding her outside of work and refusing to respond to messages that were not work-related."
• Since testifying at SBF's trial, Ellison has engaged in extensive charity work, written a novel, and worked with her parents on a math enrichment textbook for advanced high school students, per her lawyers. They said she also now has a healthy romantic relationship. Judge Lewis A. Kaplan will decide the sentence.

(More FTX stories.)