Caroline Ellison sentenced to two years in prison for massive FTX fraud

The Federal Court of New York has issued the final sentence to former Alameda Research CEO. Caroline Ellison, 29 years old, received a sentence of 24 months in prison for her role in one of the largest financial scams in US history. In addition to the prison term, she will be required to pay a fine of approximately $11 billion. The judge allowed her to serve her sentence at a minimum-security facility near Boston, where Ellison’s family resides. After her release, she will face a three-year probation period.

Leniency of the Sentence: The Role of Cooperation with Authorities

Federal Judge Lewis Kaplan showed clear sympathy towards the defendant despite the seriousness of the crime. During the sentencing announcement, he noted that Ellison was vulnerable and subjected to exploitation. “You sincerely regret your actions,” the judge said before announcing the decision.

A significant factor in the leniency was Caroline Ellison’s active cooperation with the Department of Justice. The judge stated that in his 30 years of legal practice, he had never encountered such complete and sincere cooperation as from Ellison. This became a key distinction between her case and the trial of her former partner Sam Bankman-Fried.

Contrast of Sentences: Bankman-Fried vs. Ellison

The scale of the differing punishments reflects the behavior of the two main figures involved in the largest crypto scam. Sam Bankman-Fried, founder of FTX, was found guilty on all seven counts of fraud and conspiracy. His sentence was 25 years in prison — 12 times longer than Ellison’s.

Judge Kaplan emphasized that FTX represented one of the largest financial scams in the country’s history. However, as the magistrate noted, even in the face of such a serious crime, complete “impunity” is impossible — the law demands punishment. “In such a serious case, I cannot completely exclude imprisonment,” Judge Kaplan explained before the final sentencing of Ellison.

The key difference was in their attitude towards their actions. Bankman-Fried showed no remorse, while Caroline Ellison actively cooperated with law enforcement and pleaded guilty.

Key Role in the Conviction of Bankman-Fried

Caroline Ellison’s testimony became a cornerstone in the case against her former boyfriend. During the 2024 criminal trial, she provided detailed testimony revealing the fraud scheme. Ellison testified about Bankman-Fried’s attempts to bribe foreign officials and providing creditors with deliberately misleading financial information.

Assistant US Prosecutor Daniel Sassoon, who led the case, noted during the hearing that Ellison’s testimony was decisive. Her truthful accounts of Alameda Research’s internal operations allowed the investigation to build a compelling case against the FTX leader.

Understanding the Scale of the Crime

During the sentencing, Caroline Ellison addressed the court with a brief statement. She expressed sincere remorse and apologized to former FTX and Alameda Research clients, colleagues, friends, and family members.

“The human brain poorly perceives large numbers,” she said, her voice trembling. “I cannot imagine the pain I caused.” Ellison also admitted that at every stage of the crypto scam, it became increasingly difficult for her to find a way out. “I regret not having the courage earlier,” she added.

Path to Redemption

Caroline Ellison’s lawyers argued before the court that their client had provided exceptional cooperation and posed no risk of reoffending. Her defense pointed out that she was misled by Bankman-Fried, with whom she had a romantic relationship. In her desire to please him, she participated in the fraudulent scheme, but after the FTX collapse, she “restored her moral compass.”

Both her lawyers and the probation department recommended a prison sentence with a subsequent probation period — exactly what the court imposed. Ellison has approximately 45 days to voluntarily surrender to the Bureau of Prisons and begin serving her sentence.