Bankman-Fried’s ex-girlfriend and key witness sentenced to two years for role in FTX fraud

NASSAU, BAHAMAS- Caroline Ellison, the former CEO of Alameda Research and the ex-girlfriend of FTX-co-founder Sam Bankman-Fried, has been sentenced to two years in prison and must forfeit approximately $11 billion.

The sentence was handed down by Judge Lewis Kaplan in the U.S. District Court for the Southern District of New York, following her conviction for financial fraud. The surrender date is expected to be set for after November 7.

As the prosecution’s star witness, Ellison played a crucial role in the case against Bankman-Fried, who was convicted of defrauding customers out of about $8 billion. He received a 25-year prison sentence in March. In her plea agreement, Ellison committed to relinquishing all financial gains from her time at FTX, with her attorney stating she would not profit from her involvement in the fraudulent activities.

Ellison’s testimony was instrumental in revealing the inner workings of the fraud, including details about a secret credit line from Deltec Bank & Trust that allegedly allowed Bankman-Fried to perpetuate the scheme. Her cooperation with federal investigators was highly praised, leading prosecutors to recommend a lighter sentence than the 110 years suggested by sentencing guidelines. Judge Kaplan acknowledged Ellison’s vulnerability and noted how she had been exploited by Bankman-Fried, describing her testimony as exceptionally consistent compared to his lack of cooperation.

During her sentencing, Ellison expressed remorse for her actions, apologizing to investors, lenders, and victims of the fraud. She acknowledged her participation in a conspiracy that resulted in significant financial losses for many, stating that not a day goes by without her reflecting on the harm caused.

Ellison’s relationship with Bankman-Fried complicated her role in the case. She testified that he influenced her decisions and values and that their romantic involvement obscured her judgment. She described a sense of relief following FTX’s collapse, feeling it freed her from the obligation to lie and allowed her to start taking responsibility for her actions.

In addition to her courtroom testimony, Ellison provided substantial information regarding the operations of Nassau-based Deltec Bank, asserting that without her disclosures, the extent of its involvement in the FTX collapse might have remained hidden. Her lawyers noted that her cooperation had significantly aided ongoing investigations and legal proceedings, further emphasizing her importance as a witness in this high-profile case.