Caroline Ellison, a former top executive at the cryptocurrency exchange FTX, has been sentenced to two years in prison for her role in one of the biggest financial frauds in US history. Ellison, who is also the ex-girlfriend of FTX’s founder, Sam Bankman-Fried, admitted charges of wire fraud and money laundering as part of a plea deal.
Bankman-Fried, who was sentenced to 25 years in prison for stealing over $8 billion from customers, founded FTX in 2019. The exchange quickly grew to become the third largest crypto exchange in the world, valued at $32 billion. However, in 2022, rumors of financial trouble led to a run on deposits, causing the firm to collapse and exposing Bankman-Fried’s crimes.
Ellison, who lived and worked in FTX’s offices and luxury apartments in The Bahamas, was a key figure in the company’s operations. Despite facing a maximum sentence of 110 years, she cooperated with prosecutors and testified against Bankman-Fried, detailing how he directed her and others to take money from customers without their knowledge.
Judge Lewis Kaplan praised Ellison’s cooperation but emphasized her culpability in the fraud. He stated that her help and remorse should not be a “get out of jail free card.” Ellison was ordered to forfeit over $11 billion to the court and could face additional restitution payments.
The sentencing of Ellison adds to the ongoing saga surrounding FTX and Bankman-Fried, who was convicted on charges of wire fraud and money laundering. The case has captivated the financial world and highlighted the risks associated with the cryptocurrency industry.
In a related development, Ryan Salame, the co-CEO of FTX’s Bahamian subsidiary, was sentenced to 90 months in prison for violating political campaign finance laws and operating an illegal money-transmitting business. The fallout from the collapse of FTX continues to reverberate throughout the industry, serving as a cautionary tale for investors and regulators alike.
