On Tuesday, former FTX CEO Caroline Ellison stood on a podium on the 21st floor of a Manhattan courthouse, her voice cracking as she asked the judge to reduce her sentence. Her parents and two younger sisters watched as she addressed the court.
“My mind can’t even comprehend the pain I caused him,” Allison said through tears. “That doesn’t mean I didn’t try.”
Despite Ellison’s plea not to serve prison time, and with prosecutors acknowledging her extensive cooperation in building their case against her former boyfriend, Sam Bankman-Fried, Judge Lewis Kaplan sentenced her to two years in federal prison.
Ellison will begin serving her sentence in early November and will be transferred to a maximum-security prison after Kaplan agreed to her request to serve her sentence at a facility near her family in Boston.
Bankman-Fried was her kryptonite.
Ellison’s downfall has become a subject of morbid fascination over the past two years, as the public has been fascinated by the collapse of FTX, once valued at about $32 billion, and its inner circle of 20- and 30-something executives, many of whom were in love or considered each other lifelong friends.
Ellison joined Bankman-Fried’s orbit as a trader at his hedge fund, Alameda Research, when she was just 24, and quickly became the firm’s CEO. As she admitted during three days of emotional testimony at Bankman-Fried’s trial last fall, she also played a crucial role in the fraud that brought down the empire, in which FTX funneled billions of dollars in client assets to fund disastrous deals at Alameda, along with luxury real estate, illegal campaign donations and venture capital investments.
On Tuesday, Ellison again admitted that she should have stopped the scam sooner, but couldn’t, because of what she called her admiration — and often unrequited love — for Bankman-Fried. “I’m sorry I wasn’t brave,” she said.
Despite her role in what Kaplan called “the largest financial fraud ever committed in the history of this country,” Ellison’s lawyers and prosecutors have highlighted her work with the government and FTX Bankruptcy to recover client assets and build the case against Mann-Fried. Assistant U.S. Attorney Danielle Sassone argued that Ellison deserved a lighter sentence for her cooperation.
After a lengthy speech in which he praised the history of sentencing guidelines, Kaplan praised Ellison’s work with prosecutors, saying he had “never seen someone as cooperative as Ms. Ellison,” whose testimony during the Bankman-Fried trial contained no errors or inconsistencies.
However, he wondered why she had followed such a dark path, considering Bankman-Fried to be her “kryptonite.”
The two-year sentence was significantly harsher than the sentence recommended by Ellison’s attorneys and the probation department, though she is unlikely to serve the full term.
She will also have to participate in a forfeiture process that would see any money recovered from the fraud transferred to victims of FTX’s collapse. Ellison kept the vast majority of her savings in FTX and made no effort to recover any money, giving up her largest stake — a $10 million investment in artificial intelligence giant Anthropic. According to her lawyers, she also agreed to split any money she earned from telling her story about her role at FTX, so she could not profit from her time in the crypto empire.
Bankman-Fried was sentenced to 25 years in prison in March, and former FTX CEO Ryan Salam was sentenced to 25 years in prison in March. receive He was sentenced to 7.5 years in May after pleading guilty but deciding not to cooperate with prosecutors. Two other insiders, Nishad Singh and Gary Wang, are still awaiting sentencing.