Caroline Ellison, the star witness in the prosecution of former FTX Co-Founder and CEO Sam Bankman-Fried, has been sentenced to two years in prison by a New York federal court. In addition to her prison sentence, Ellison has been ordered to forfeit $11 billion. The news was reported on Friday by CNBC’s Mackenzie Sigalos, who explained that Ellison, once the CEO of FTX’s investment arm Alameda Research, received a harsher sentence than expected despite her cooperation with the government.
Initially, the federal Probation Department recommended a sentence reduction for Ellison. However, Judge Lewis Kaplan found this insufficient, citing the massive scale of the FTX fraud case. Judge Kaplan described the FTX case as “the greatest financial fraud perpetrated in the history of the U.S.” and determined that leniency would not be appropriate.
This marks the third time that Judge Kaplan has issued a harsher-than-expected sentence in the FTX case. Sam Bankman-Fried, the co-founder of FTX, received a 25-year prison sentence despite the recommendation for 40-50 years. Another key executive, Ryan Salame, received a 7.5-year sentence, compared to the 5-7 years that was recommended. Both individuals were heavily involved in the company’s operations and collapse, and their sentences reflect the serious nature of the crimes.
Ellison pled guilty in December 2022 and has since been cooperating with authorities to help recover otherwise irretrievable crypto assets. This cooperation was initially expected to lead to a more lenient sentence, but Judge Kaplan emphasized the severity of the fraud and chose to impose a two-year sentence instead.
In terms of next steps, Judge Kaplan requested that Ellison serve her sentence in a minimum-security facility near Boston, if possible. He ordered her to surrender to authorities on or after November 7, 2024.
In addition to Ellison, two other former FTX executives, Nishad Singh and Gary Wang, are awaiting sentencing. Singh is set to be sentenced on October 30, while Wang will face sentencing on November 20. Both individuals have pleaded guilty and are expected to receive their own judgments from Judge Kaplan, who has demonstrated a pattern of issuing harsher-than-expected sentences to deter future misconduct in the crypto space.
