Former cryptocurrency executive Caroline Ellison was jailed for two years on Tuesday for her involvement in the theft of approximately $8 billion in customer funds tied to the collapse of the FTX exchange, founded by her ex-boyfriend Sam Bankman-Fried.
Ellison, 29, has pleaded guilty to seven felony counts of fraud and conspiracy and served as a key prosecution witness in Bankman-Fried’s trial, where he received a 25-year prison sentence last year.
The former crypto bigwig (Ellison) sentencing comes despite some legal experts suggesting Ellison may skirt jail time for her extensive cooperation against Bankman-Fried, the former billionaire head of the $32 billion cryptocurrency exchange FTX, according to Forbes.
Prosecutors have acknowledged her willingness to assist in uncovering the details of FTX’s downfall, contrasting her accountability with Bankman-Fried’s denials during the crisis, and they(prosecutors) supported a more lenient sentence for Ellison due to her “extraordinary cooperation,” without sharing a recommended sentence, while Ellison’s attorneys have put forth three years of supervised release and no prison time.
According to Axios and Bloomberg, New York-based federal Judge Lewis Kaplan gave a 24-month sentence to the 29-year-old Ellison, who pled guilty in Dec. 2022 for a similar slate of crimes as Bankman-Fried, including wire fraud and conspiracy to commit money laundering.
Bloomberg reported that Ellison, who testified against her ex-boyfriend who was jailed for 25 years in March, can serve her time at a minimum-security institution. Prosecutors described her as an “exemplary” witness and called on Kaplan to levy a “lenient sentence” Tuesday.
Though Kaplan said he’d “never seen” a cooperator as strong as Ellison, she was “not inviolable” and Bankman-Fried had her “Kryptonite,” reported Bloomberg.
Ellison served as the chief executive of the crypto hedge fund Alameda Research, the sister firm of FTX, and Alameda’s unraveling, as it lost FTX customer funds, led to the eventual bankruptcies of both firms and the arrests of Bankman-Fried, Ellison and other executives.
“I participated in a criminal conspiracy that ultimately stole billions of dollars from people who entrusted their money with us,” Ellison said at court Tuesday, adding it was a “relief” to fully cooperate.
