Caroline Ellison, the former girlfriend of convicted crypto fraudster Sam Bankman-Fried, was sentenced to two years in prison for her role in the fraud scheme that led to the collapse of FTX.
Ellison had pleaded guilty to money laundering and fraud charges, and had been the prosecution’s star witness during Bankman-Fried’s own trial. Ellison had served as CEO of Alameda Research, a sister company of FTX that had misappropriated billions in customer funds from the crypto exchange.
According to The Wall Street Journal, Ellison said at her sentencing hearing Tuesday, Sept. 24, “To all the victims and everyone I harmed directly and indirectly, I am so, so sorry. I can’t even imagine the pain I caused.”
Ellison has been out on bail since December 2022. Her attorneys had been trying to keep her out of prison, and prosecutors didn’t even recommend a particular sentence, calling her cooperation “not only substantial, but exemplary.” Still, Judge Lewis Kaplan handed down the sentence saying her genuine remorse and cooperation should not serve as a “get out of jail free card.” (Following her two years in prison, Ellison will also have to serve three years of supervised release.)
Ellison was one of three top FTX execs and associates who took plea deals following FTX’s collapse in November 2022. At one time, FTX was the third-largest crypto exchange in the world, but it crumbled days after balance sheets related to Alameda Research were leaked. The documents led to allegations that Bankman-Fried used the investments of FTX customers to pay off debts and make side investments and contributions, transferring funds without proper disclosure and oversight.
Ellison dropped several bombshells while testifying during Bankman-Fried’s trial. Among them: that Bankman-Fried and others bribed a Chinese official $100 million to unfreeze $1 billion worth of Alameda funds that had been stuck on a China-based crypto exchange. She also said that in fall 2022, not long before FTX collapsed, Bankman-Fried tried to raise capital by selling shares of FTX to Saudi Prince Mohammed bin Salman — an infusion of cash that would’ve also helped cover up the alleged fraud.
“If we were able to raise money, that was money that we could use to repay the money we had borrowed from FTX customers,” Ellison said during the trial.
As for her romantic relationship with Bankman-Fried, Ellison said on the stand that she often felt like an “unequal partner” in their relationship. The trial was also marred by Bankman-Fried’s alleged attempts to intimidate Ellison: He infamously had his bail revoked for leaking her personal writings about their relationship to The New York Times, and prosecutors tried to argue he was intimidating her with laughter and scoffs during her testimony.
Bankman-Fried was ultimately found guilty and sentenced to 25 years in prison. He’s spent the past year in a Brooklyn jail as his lawyers prepped an appeal, which was finally filed earlier this month. (He’s also, reportedly, sleeping in the same cell as Sean Combs.)