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Caroline Ellison, Former Alameda CEO, Gets 2 Years and Forfeits $11B In FTX Case
- Caroline Ellison, ex-CEO of Alameda Research, was sentenced to two years in prison for her role in the FTX fraud, despite cooperating with prosecutors.
- Judge Lewis Kaplan, who also sentenced FTX founder Sam Bankman-Fried to 25 years, emphasised the seriousness of her actions, rejecting a “get-out-of-jail-free card”.
- Ellison’s cooperation was crucial in convicting Bankman-Fried.
- However, her “exemplary” assistance was not of much help as the judge felt her involvement in the US$8 billion misappropriation warranted prison time.
Caroline Ellison, the former CEO of the disgraced Alameda Research, has been sentenced to two years in prison for her involvement in the FTX crypto exchange fraud.
The sentencing took place in a Manhattan court. Judge Lewis Kaplan, who had previously sentenced FTX founder and Ellison’s former boyfriend Sam Bankman-Fried to 25 years, recognised Ellison’s cooperation but emphasised the seriousness of the crime, stating that there could be no get-out-of-jail-free card.
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No Free Lunch For You
Ellison was the prosecutors’ main asset in the case against FTX and Alameda Research executives, in which SBF and Ryan Salame were sentenced to prison.
Her testimony was crucial in securing conviction for SBF, and prosecutors even commended her “exemplary” cooperation. So you can imagine Ellison’s and her lawyers’ faces when it turns out she still has to do time for helping launder and misuse billions of dollars from investors’ money.
Judge Kaplan noted that, despite Ellison expressing “genuine” remorse, the fraud scheme resulted in misappropriating US$8B (AU$11.6B) worth of customers’ funds. And if you followed the case closely in 2023, you probably don’t want to remember the heinous things on which that money was spent.
Oh, and besides the two years in jail, she also has to forfeit about US$11B (AU$15.9B). Whether or not she has this amount of money, it could be argued that all of the money that Ellison makes from this time on, they can take without a problem.
Again, the remorse card. Ellison’s defence had argued for leniency, requesting supervised release without prison, citing her genuine remorse and the influence SBF had over her and… whatnot.
They even described her as trapped in a “social bubble” around her former partner. However, despite recommendations from the federal Probation Department and prosecutors for no jail time, the judge insisted that her actions merited incarceration and that cooperation doesn’t erase responsibility, he affirmed.
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In the meantime, Bankman-Fried’s lawyers have filed an appeal, claiming bias in his trial and arguing that he was unfairly restricted from presenting evidence. They suggest that FTX customers could potentially recover their funds through bankruptcy, contradicting the narrative of irreversible losses.
Author
José Oramas
José is a journalist and translator with a keen interest in blockchain and cryptocurrencies.
