Caroline Ellison, the former CEO of Alameda Research, has been sentenced to 24 months in prison for her involvement in the collapse of FTX.
In addition to her prison term, Ellison is required to forfeit $11 billion. Her sentencing follows a guilty plea in December 2022 to two counts of wire fraud and five conspiracy charges, part of a cooperation deal she made with the government.
Despite the severity of the charges, Ellison’s cooperation played a significant role in reducing her sentence. Prosecutors recommended leniency, noting her “extraordinary” and “timely” assistance. Her legal team, as well as the federal Probation Department, even argued for no jail time. “I’ve seen a lot of cooperators in 30 years. I’ve never seen one quite like Ms. Ellison,” remarked Judge Lewis Kaplan during the hearing, highlighting her honest and self-incriminating testimony.
Ellison’s cooperation was crucial in building the case against FTX cofounder Sam Bankman-Fried, who she testified against for three days. Prosecutors credited her quick confession with enabling the government to promptly indict Bankman-Fried, preventing him from fleeing or interfering with the investigation. John J. Ray, the new FTX CEO overseeing the company’s restructuring efforts, also praised her willingness to come forward and assist in the recovery of customer assets.
While Ellison has expressed genuine remorse for her role in the scandal, the fallout from the case has taken a toll on her life. She has faced intense public scrutiny, with personal details from her diaries published and even her psychiatrist giving interviews about her. In addition to this, the crypto community has subjected her to harsh, misogynistic criticism. According to her legal team, Ellison has struggled to find work and lives fearing being recognized in public.
Though she did not personally benefit from the fraud, Ellison remains a central figure in one of the most significant financial scandals in recent history. Despite her efforts to cooperate, the repercussions of her involvement will likely follow her for years to come.
