On September 24, a federal judge in Manhattan sentenced Caroline Ellison, the former head of Alameda Research, the FTX hedge fund, to 2 years in prison and $11 billion in forfeiture.
The judge recognized that she played a significant role in the theft of $8 billion in client funds from the FTX crypto exchange, which was founded by her ex-boyfriend Sam Bankman-Fried. Allison was facing a total of up to 110 years in prison. But now she may even be released a few months earlier if she shows good behavior in prison.
Ellison, 29, pleaded guilty to seven counts of fraud and conspiracy, and also served as a prosecution witness in the trial of Bankman-Fried, who was convicted of fraud and other crimes last year and sentenced to 25 years in prison in connection with the collapse of the FTX.
From 2021 to 2022, Allison managed Alameda Research, a cryptocurrency hedge fund founded by Bankman-Fried.
Bankman-Fried, 32, capitalized on the cryptocurrency boom during the COVID-19 pandemic and by October 2021, he was already worth $26 billion. He became known as a generous philanthropist and sponsor of the US Democratic Party.
The wealth disappeared when FTX collapsed in November 2022 amid a flurry of client withdrawals following rumors of financial problems at the crypto exchange and its related company, Alameda Research.
Allison pleaded guilty in December 2022, cooperated with the investigation, and stated that it was her ex-boyfriend who ordered her and others to take money from FTX customers without their knowledge.
Bankman-Fried is appealing her conviction and sentence.
Nishad Singh and Gary Wang, two other former FTX executives who cooperated with prosecutors, will be sentenced on October 30 and November 20, respectively.
Source: Bloomberg
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