Caroline Ellison, a key figure in the FTX scandal, is now serving a two-year prison sentence in Connecticut. She was the former CEO of Alameda Research, the trading firm linked to FTX, and played a crucial role in the prosecution of FTX founder Sam Bankman-Fried.
Ellison’s Role in the FTX Fraud
Ellison’s legal troubles stem from her involvement in a massive fraud scheme that saw billions of dollars in customer funds misappropriated. These funds were used to support Alameda’s trading operations and other ventures.
After FTX’s collapse in late 2022, Ellison reached a plea deal with federal prosecutors, admitting to conspiracy and financial fraud charges. Her cooperation with authorities was reportedly instrumental in Bankman-Fried’s conviction earlier this year.
Judge Calls FTX Fraud “Greatest Financial Fraud in US History”
Despite the probation department’s recommendation for no prison time, Judge Lewis Kaplan sentenced Ellison to two years behind bars. He emphasized the need for a deterrent effect, stating that her actions warranted a more significant punishment.
During the sentencing, Kaplan referred to FTX as “the greatest financial fraud perpetrated in the history of the US.” While acknowledging Ellison’s “extensive cooperation,” he made it clear that a “get-out-of-jail-free card” was not an option.
Other FTX Executives Facing Legal Consequences
Ellison’s sentence comes as several other former FTX executives face legal repercussions for their roles in the scandal.
Nishad Singh, another former executive, received a sentence of time served and three years of supervised release. Gary Wang, a computer programmer who helped build the FTX exchange, is asking for a non-custodial sentence, arguing that his cooperation with prosecutors and alleged “relative lack of culpability” should spare him jail time. His sentencing is scheduled for November 20th.
Wang’s lawyer stated that his client was unaware of the scheme when it started and never took any affirmative steps to deceive anyone. He also pointed out that Wang’s son is due to be born just days after the sentencing.
