Caroline Ellison to Serve 2 Years & Forfeit $11B
Former Alameda Research CEO Caroline Ellison, 29, was sentenced to two years in a minimum-security prison for her involvement in FTX's collapse, on 24 September.
Judge Lewis Kaplan of the Southern District of New York ruled that Ellison must forfeit approximately $11 billion in earnings from FTX.
Caroline Ellison sentenced to 24 months in PRISON. And they’re taking $11 BILLION from her.
Wow… hard to believe she had $11B!! pic.twitter.com/SlNUWQFj5H
— Alvin Foo (@alvinfoo) September 25, 2024
She is expected to serve her sentence at a minimum-security facility near Boston, close to her family, and will face three years of supervised release after completing her term.
Her surrender date is set for on or after 7 November 2024.
Sympathetic Judge Gives Light Sentence to Ellison
Ellison, a key witness in the government's trial against FTX founder Sam Bankman-Fried (SBF)—her former boyfriend—faced the possibility of 110 years in prison for her role in the FTX collapse.
However, Judge Kaplan expressed notable sympathy for her cooperation.
The judge had expressed:
“You're a very strong person, Ms. Ellison, in some ways, but not inviolable. Mr. Bankman-Fried had your Kryptonite. […] You were vulnerable and you were exploited. You are genuinely remorseful."
Kaplan also noted her cooperation, saying:
"I've seen a lot of cooperators in 30 years here, I've never seen one quite like Miss Ellison."
Judge says Caroline Ellison was the most consistent cooperator he'd seen in 30 years
Better at cooperating with the feds than at tradinghttps://t.co/m5V3fEfudv
— 0xAphelion (@0xAphelion) September 24, 2024
As the sentence was read, Ellison stood with her hands clasped, while family members in the courtroom were visibly emotional.
Despite her cooperation, Kaplan acknowledged the gravity of the crime, calling FTX "one of the greatest financial frauds ever perpetrated in this country."
He emphasized that Ellison's assistance alone was not enough to avoid prison time.
He remarked before delivering her sentence of 24 months:
"In a case this serious, to be literally a 'get out of jail free' card is not something I can see my way through to."
Under federal law, Ellison will be required to serve at least 75% of her sentence before becoming eligible for parole.
Ellison Speaks Up, Says She's Bad at Math
Caroline Ellison, a once-reclusive figure, expressed that she faced significant harassment both in the media and in public from the crypto community, leading to fears about her personal safety.
In the case against SBF, her former colleague and alleged boyfriend, Ellison cooperated extensively with prosecutors, prompting them to recommend leniency.
Ellison's legal team argued that her "extraordinary cooperation" demonstrated she posed no risk of reoffending.
Both her attorneys and the probation department recommended a sentence of time served with three years of probation.
However, Judge Kaplan, during sentencing, made it clear that no "get out of jail free" card would be granted.
🚨NEW: CAROLINE ELLISON SENTENCED TO 24 MONTHS IN A MINIMUM SECURITY PRISON. SHE ALSO HAS TO FORFEIT $11B IN ASSETS. THE SURRENDER DATE SHOULD BE ON OR AFTER NOVEMBER 7TH, 2024
“THERE CANNOT BE A GET OUT OF JAIL FREE CARD.” - JUDGE KAPLAN ‼️ pic.twitter.com/GBTSAhQxBS
— Autism Capital 🧩 (@AutismCapital) September 24, 2024
Anjan Sahni, Ellison's lawyer and managing partner at Wilmer Hale, stated that his client had been misled by SBF, with whom she had a romantic relationship. https://www.coinlive.com/news/sam-bankman-fried-s-ftx-regrets-cast-shadow-on-25-year-prison-term
Sahni explained that her desire to please him led her to participate in the fraudulent scheme, but after FTX's collapse, she regained her "moral compass."
Ellison spoke briefly before her sentence, apologising to former customers of FTX and Alameda, as well as her friends, family, and former colleagues.
Ellison stated:
"I want to say how sorry I am. The human brain is truly bad at understanding big numbers. Not a day goes by I don’t think about the people I hurt. I’m sorry I wasn’t brave. Lying isn't something that comes natural to me.”
🚨 CAROLINE ELLISON: “I want to say how sorry I am. The human brain is truly bad at understanding big numbers. Not a day goes by I don’t think about the people I hurt. I’m sorry I wasn’t brave. Lying isn’t something that comes natural to me.”
(sketch from previous trial) pic.twitter.com/X8KxE717tG
— Autism Capital 🧩 (@AutismCapital) September 24, 2024
She now has approximately 45 days before she must voluntarily surrender to the Bureau of Prisons to begin serving her sentence.
She added:
"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."
Crypto Community Divided on Ellison's Judgement
Following Ellison's sentencing, the crypto community erupted in polarised reactions.
Some commentators suggested that Ellison was fully aware of her actions, describing her as a skilled deceiver, and posited that her lack of remorse highlighted issues of perceived female privilege.
Like Caroline Ellison, gurl was that novel a dating book..cause how you remorseful but found time to date...healthy? Gurl i know you still lying...send her ass to jail #ftx #scandal pic.twitter.com/yftYS4Nmjm
— ,La (@ElonMuskballsac) September 24, 2024
Genuinely remorseful???
Female privilege strikes again.
Caroline Ellison Sentencing: FTX Fraud Case Latest News & Updates - Bloomberg https://t.co/szT9yRYMk5 pic.twitter.com/HxK4PgwTZ8
— Nyan Nyan (@CatNyanpital) September 24, 2024
Conversely, others argued that her two-year sentence was excessively harsh.
It's clear that Ellison is a naive victim of a toxic relationship. She is remorseful and cooperative. There is little risk of recidivism. The sentence is unduly harsh in light of the circumstances. Please petition Judge Kaplan for reconsideration. https://t.co/uZELppxRO4
— David Sandler (@willy1555) September 24, 2024
While many acknowledged that Ellison warranted some leniency, a number of voices pointed out that she had numerous opportunities to halt the fraudulent activities long before tens of thousands of customers were defrauded.
.@DennisKelleher tells @allisondmorrow @CNN “There is no question she deserves leniency. But she could have single-handedly stopped this fraud at any time, long before tens of thousands of customers were ripped off.”https://t.co/I9hlNPpBbg
— Better Markets (@BetterMarkets) September 24, 2024
This divergence in opinion reflects the complex emotions surrounding her case and the broader implications for accountability in the crypto space.
