In a landmark ruling, Caroline Ellison, the former CEO of Alameda Research, has been sentenced to two years in prison and ordered to forfeit a staggering $11 billion for her role in the massive fraud and conspiracy that led to the downfall of cryptocurrency exchange FTX. The sentence, handed down by Judge Lewis Kaplan in a New York federal court, was significantly harsher than the recommended three years of supervised release with no prison time.
Ellison’s cooperation with prosecutors was instrumental in securing the conviction of her former boyfriend, FTX founder Sam Bankman-Fried, who was sentenced to 25 years in prison earlier this year. Despite her extensive cooperation, Judge Kaplan emphasized the need for a deterrent sentence to prevent similar financial frauds in the future.
The FTX scandal, which has been described as one of the greatest financial frauds in US history, saw Ellison’s company receive a significant portion of the $8 billion in customer funds looted by Bankman-Fried. The stolen money was used to fund Alameda’s trading operations and other purposes.
Ellison’s defense team had requested a no-prison sentence, citing her remorse and cooperation with authorities. However, Judge Kaplan was unmoved, stating that a lenient sentence would be seen as a “get-out-of-jail-free card” and undermine the deterrent effect of the law.
In a tearful statement, Ellison apologized to those affected by her actions and expressed deep regret for not leaving FTX and Bankman-Fried’s orbit sooner. She will remain free on bail until she surrenders to prison on or after November 7.
The sentencing marks a significant milestone in the FTX saga, which has sent shockwaves through the cryptocurrency industry. Two other former FTX executives, Gary Wang and Nishad Singh, are scheduled to be sentenced later this year.
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