In a high-profile trial over the collapse of cryptocurrency exchange FTX, former chief executive Caroline Ellison was sentenced to two years in prison. Despite active cooperation with the investigation, Judge Lewis Kaplan considered it necessary to impose a real sentence for participation in the theft of $8 billion of client funds, Reuters reports.
Image source: Mariia Shalabaieva/Unsplash
Allison, 29, pleaded guilty to seven counts of fraud and conspiracy. She was a key prosecution witness in the trial of her ex-boyfriend Sam Bankman-Fried, the founder of FTX, who was recently sentenced to 25 years in prison for the largest financial fraud in US history. “This was, if not the largest financial fraud in the history of this country or anywhere else, then close to it,” the judge said at a hearing in Manhattan federal court.
Image source: Reuters (screenshot from video)
Despite the fact that Ellison faced up to 110 years in prison, prosecutors asked for leniency due to her active cooperation with the investigation. Speaking outside the court, Allison expressed deep remorse: “Not a day goes by that I don’t think about all the people I’ve hurt. My brain can’t even truly comprehend the extent of the damage I’ve caused.” She also talked about her attempts to leave the cryptocurrency hedge fund she ran, but she didn’t have the courage because she was afraid of Bankman-Fried.
Image source: Wikipedia.org
Prosecutor Danielle Sassoon emphasized the importance of Ellison’s testimony. “Unlike Bankman-Fried, there is no evidence that she was motivated by greed or a desire for risk and power, nor was she cunning at trial in the way Bankman was,” Sassoon said. Ellison’s lawyer, Anjan Sahni, unsuccessfully urged the court not to impose a prison sentence at all to “send a strong message about the value of timely, honest and full cooperation with authorities in financial crime cases.”
Judge Kaplan recommended that Ellison serve her sentence in a minimum security prison. If she behaves well, she could be released a few months before her two-year sentence. At the same time, according to Reuters, Kaplan said at the sentencing hearing that “he is not satisfied that Ellison’s repentance and cooperation are an obvious pretext for release from prison.” Two other former FTX executives who cooperated with the investigation are awaiting sentencing in late October and November. Lawyers for Bankman-Fried himself, whose $26 billion fortune evaporated following the collapse of FTX in November 2022, are currently appealing the verdict.