Caroline Ellison Faced 110 Years in Prison, But Got 24 Months

Caroline Ellison, the ex-CEO of Alameda Research and ex-girlfriend of FTX founder Sam Bankman-Fried, faced her sentencing on Tuesday in Manhattan for her involvement in the theft of approximately $8 billion from customers on the cryptocurrency platform. She faced charges of wire fraud, money laundering, and securities fraud.

She entered the day with the potential to face 110 years in prison. Instead, she leaves the day sentenced just to 2 years.

Ellison cooperated in Bankman-Fried’s trial as a prosecution witness and pleaded guilty to seven felony counts in December 2022. As the CEO of Alameda Research, which operated as the trading arm of FTX, Ellison admitted that she was directed to misuse customer funds without their consent. 

The 29-year-old was expected to see far less jail time than the maximum sentence she was up against. That’s partly because of the precedent set by Bankman-Fried, who is only serving a 25-year sentence for his involvement in the FTX collapse of 2022 and her involvement in getting him behind bars.

She and her lawyers were shooting for no prison time the entire way. Her lawyer, Anjan Sahni, wrote in a court filing in early September that from the beginning of this ordeal, their client has “unflinchining ackowledged her own wrongdoing” and has proved herself “an enormously credible and important cooperating witness.”

🚨 JUDGE KAPLAN: “I’ve seen a lot of cooperators in 30 years. I’ve never seen one quite like Ms. Ellison.”

Caroline Ellison of FTX wins the best snitch of all time award! pic.twitter.com/mXswHr8h6Q

— Autism Capital 🧩 (@AutismCapital) September 24, 2024

One interesting wrinkle in Ellison’s case is that the FTX users who lost all their investments are getting their money back. FTX did steal unfathomably large amounts of its customers’ money, but users will also be getting their money back and not left high and dry as initially thought. In May, it was first revealed that 98% of creditors would be getting back 118% of their claims in cash as part of FTX’s new reorganization plan. 

Two other prominent FTX executives will face facing their sentencing later this year, including Gary Wang and Nishad Singh. Both also testified against Bankman-Fried, and each face charges of fraud.