Caroline Ellison, the former executive who played a role in the collapse of the FTX crypto exchange and later became the star witness in the prosecution of FTX founder Sam Bankman-Fried, reportedly received a harsher sentence than the one recommended by the federal Probation Department.
Ellison was sentenced Tuesday (Sept. 24) to two years in prison and ordered to forfeit $11 billion, CNBC reported Tuesday.
The Probation Department had recommended a sentence of three years of supervised release, with no prison time, according to the report.
Judge Lewis Kaplan praised Ellison’s cooperation with prosecutors, saying she provided “one of the huge pieces of evidence in the case” against Bankman-Fried, per the report. However, he said the criminal sentence was needed to deter others from committing fraud.
A “literal get-out-of-jail-free card I can’t agree to,” Kaplan said, according to the report.
Ellison will remain free on bail until around Nov. 7, per the report.
Ellison, who had headed sister company Alameda Research, pleaded guilty to fraud and conspiracy. She also testified against FTX founder Sam Bankman-Fried — her former boyfriend — at his trial for stealing billions in customers funds.
Bankman-Fried was convicted of fraud and other charges last year and sentenced to 25 years in prison. He is appealing the sentence.
Ellison, 29, sought to avoid jail time. In a court filing earlier this month, her attorneys asked Kaplan for a sentence of time served and supervised release, citing Ellison’s “extraordinary” cooperation with the prosecution.
“Caroline blames no one but herself for what she did. She regrets her role deeply and will carry shame and remorse to her grave,” the filing said.
A report Tuesday by The Wall Street Journal (WSJ) said prosecutors acknowledged that proving Bankman-Fried’s guilt at trial would have been difficult without Ellison.
“The government cannot think of another cooperating witness in recent history who has received a greater level of attention and harassment,” prosecutors wrote to the judge, per the WSJ report.
Ellison’s lawyers said she has continued to work with the government, providing the Justice Department with information on people who enabled the FTX fraud and others taking part in potential cryptocurrency-related crimes.
That report also painted a sympathetic portrait of Ellison’s post-FTX/Alameda life, noting that she’s now dating a new boyfriend — another former FTX employee — and has spent the past year writing a romance novel and doing volunteer work.
She is also collaborating with her parents on a math textbook aimed at advanced high school students. (Ellison’s parents are both professors, as are Bankman-Fried’s).
Meanwhile, Bankman-Fried recently asked for a new trial, arguing that Kaplan had hindered his defense. In a court filing, the one-time crypto wunderkind argued that “everyone rushed to judgment” after FTX’s implosion and that a “sentence first-verdict afterwards tsunami” prevented a fair court proceeding.
“When the government introduces evidence, defendants have the right to rebut that evidence and present their side of the story,” the filing said. “But none of that happened here.”
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