Caroline Ellison has been sentences to two years in prison and ordered to forfeit $11 billion U.S. for her role in the massive fraud that led to the collapse of cryptocurrency exchange FTX.
Ellison was the star witness in the prosecution of her former boyfriend, FTX founder Sam Bankman-Fried. Despite her cooperation with prosecutors, Ellison was sentenced to jail time.
The sentence was harsher than the three years of supervised release that had been recommended by prosecutors in the case.
Ellison had run the hedge fund Alameda Research, which had received much of the $8 billion U.S. in customer funds taken by Bankman-Fried from FTX, a crypto exchange that was once valued at $32 billion U.S.
The money taken from FTX was used to prop-up Alameda Research and funds its trading operations.
The judge in the case, Lewis Kaplan, praised Ellison for her cooperation with prosecutors but said she needed to serve time in prison to deter other people from committing similar frauds.
Kaplan allowed Ellison to remain free on bail until she surrenders to prison either on or after Nov. 7 of this year.
Thanks largely to Ellison’s testimony, Bankman-Fried was convicted of seven criminal fraud charges and sentenced to 25 years in prison and ordered to pay $11 billion U.S. in forfeiture.
The billions of dollars lost when FTX initially collapsed in November 2022 has since been recovered by bankruptcy trustees in the case.
