Caroline Ellison, the former CEO of Alameda Research and key witness in the trial of Sam Bankman-Fried, was sentenced Tuesday to two years in prison for fraud and conspiracy. Ellison, who helped secure the conviction of Bankman-Fried—her former boss and ex-boyfriend—was also ordered to forfeit $11 billion for her role in the collapse of FTX, the cryptocurrency exchange founded by Bankman-Fried.
Ellison, 29, had pleaded guilty to conspiracy and financial fraud in December 2022, a month after FTX filed for bankruptcy. Her testimony during Bankman-Fried’s trial in November 2023, where he was convicted on seven criminal fraud charges and sentenced to 25 years in prison, was described by prosecutors as the “cornerstone of the trial.”
Ellison's legal team had requested a lighter sentence of time served and supervised release, pointing to her full cooperation with U.S. authorities. They argued that she had quickly returned from FTX's headquarters in the Bahamas to assist federal regulators and played a critical role in untangling the collapse of FTX and Alameda. FTX's current CEO, John Ray, acknowledged her cooperation as valuable in preserving “hundreds of millions of dollars” in assets for the bankrupt crypto firm.
Her defense team portrayed her as having been manipulated by Bankman-Fried, who isolated her and warped her moral judgment, leading her to help “steal billions” under his direction. They also cited character testimonials and argued that she was coerced into criminal activity by Bankman-Fried, who exploited both their professional and personal relationship.
Before its downfall, FTX was one of the largest cryptocurrency exchanges globally, known for its lobbying in Washington and high-profile marketing efforts, including a Super Bowl commercial. Bankman-Fried and his executives were charged with misusing customer funds for risky investments, luxury purchases, illegal political contributions, and bribes to Chinese officials.
Ellison is the second top FTX executive to be sentenced, following Ryan Salame, who was sentenced to seven and a half years in prison. Two more former executives, Nishad Singh and Gary Wang, are set to be sentenced in the coming months.
