Caroline Ellison, the former CEO of Alameda Research and key witness in the trial of FTX founder Sam Bankman-Fried, has been sentenced to two years in prison for her role in the $11 billion FTX fraud scheme.
Ellison, who was also romantically involved with Bankman-Fried, testified extensively during the trial, detailing how she assisted in funneling billions of dollars in customer funds to cover Alameda Research’s losses.
Ellison’s testimony over three days was crucial in securing Bankman-Fried’s conviction, leading to his 25-year prison sentence.
Despite her cooperation with federal prosecutors, the 29-year-old was unable to avoid prison time herself, although she had hoped that her full disclosure and remorse would spare her a sentence behind bars.
FTX Fraud Scheme
The collapse of FTX in November 2022 was triggered by a news report based on a leaked Alameda balance sheet, which led to a mass withdrawal of customer funds. Days later, FTX filed for bankruptcy protection. As the CEO of Alameda Research, Ellison admitted to helping Bankman-Fried misuse FTX customer funds for risky investments and deceiving lenders about the company’s financial situation.
