A federal judge in Manhattan sentenced Caroline Ellison, the former head of Alameda Research and hedge fund FTX, to 2 years in prison on September 24, along with the forfeiture of $11 billion.
The judge acknowledged that she played a significant role in the theft of $8 billion in client funds from the FTX cryptocurrency exchange founded by her ex-boyfriend, Sam Bankman-Fried. Ellison faced a total of up to 110 years in prison. However, she may now be eligible for early release by a few months for good behavior in prison.
The 29-year-old Ellison pleaded guilty to seven counts of fraud and conspiracy, and she testified against Bankman-Fried during his trial, where he was found guilty of fraud and other charges last year and sentenced to 25 years in prison due to the collapse of FTX.
Ellison led Alameda Research, a cryptocurrency hedge fund founded by Bankman-Fried, from 2021 to 2022.
The 32-year-old Bankman-Fried capitalized on the cryptocurrency boom during the COVID-19 pandemic, amassing a fortune of $26 billion by October 2021. He gained notoriety as a generous philanthropist and Democratic Party donor in the United States.
His wealth evaporated when FTX collapsed in November 2022 amid a surge of customer withdrawals following rumors of financial troubles at the exchange and its associated company, Alameda Research.
Ellison pleaded guilty in December 2022, cooperated with investigators, and stated that it was her former boyfriend who instructed her and others to take money from FTX clients without their knowledge.
Bankman-Fried is appealing his sentence and conviction.
Nishad Singh and Gary Wang, two other former FTX executives who cooperated with prosecutors, are scheduled to be sentenced on October 30 and November 20, respectively.
Source: Bloomberg
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