Caroline Ellison was sentenced to two years in federal prison on Tuesday for her involvement in the FTX fraud scandal.
The 30-year-old was also ordered to forfeit $11 billion, which she earned through her association with the now-collapsed cryptocurrency exchange.
Ellison’s Cooperation
Judge Lewis A. Kaplan, who presided over the case, acknowledged the former Alameda Research CEO’s cooperation with the prosecution, “I’ve never seen a cooperator quite like Miss Ellison,” he remarked. Despite this, Kaplan emphasized that the scale of the FTX fraud meant she could not avoid prison time. “Cooperation isn’t a ‘get out of jail free’ card in a case of this magnitude,” he added.
Her sentence includes three years of supervised release upon completing her prison term, which she could serve at a minimum-security facility near Boston. Due to the federal nature of her crime, she has to serve at least 75% of her sentence before being eligible for parole.
Prosecutors described Ellison’s testimony as crucial to Bankman-Fried’s conviction, calling it the “cornerstone” of the case in a memo before Tuesday’s hearing. Assistant U.S. Attorney Danielle Sassoon also highlighted this, contrasting her remorse with his lack of accountability.
Her attorneys also argued that her “extraordinary cooperation” and low risk of reoffending should result in a more lenient sentence. Her legal team and probation department had previously recommended time served plus three years probation.
Her lawyer, Anjan Sahni, said Ellison had been manipulated by SBF, with whom she had a past romantic relationship, and that she had since “recovered her moral compass.” Judge Kaplan added, “You were vulnerable, and you were exploited.”
SBF’s Appeal for New Trial
Meanwhile, the FTX founder is seeking a new trial with a different judge, claiming bias in his previous case. His legal team has filed an appeal, arguing that Judge Kaplan, who presided over the original trial, showed a prejudicial attitude that they believe impacted the verdict.
Additionally, a group of doctors submitted a brief supporting his appeal, citing his neurodivergent conditions, including autism spectrum disorder (ASD) and ADHD. They argued that his conditions, combined with a lack of access to necessary medication during the trial, affected his ability to communicate effectively and contributed to his conviction.
Before being sentenced, Ellison was remorseful, apologizing to FTX’s former customers, her family, and colleagues.”The human brain is bad at comprehending big numbers,” she said. “I can’t even begin to imagine the pain I’ve caused.”
She concluded, “If you had told me back in 2018 that I would end up pleading guilty to fraud, I would have told you you were crazy… At each stage of the process, it became harder and harder to extricate myself…I’m sorry I wasn’t brave.”