A U.S. District Court judge has sentenced Caroline Ellison, a former advisor and ex-girlfriend of convicted cryptocurrency fraudster and FTX founder Sam Bankman Freed, to two years in prison.
The New York Times reported on Ellison’s sentencing for his role in the $8 billion FTX cryptocurrency exchange fraud, which sent Bankman Freed to 25 years in federal prison in March. After serving his sentence, Ellison will be required to serve three years of probation.
Ellison pleaded guilty to seven counts of fraud in late 2022, shortly before Bankman Freed was extradited from the Bahamas to the United States. Sanjay Wadhwa, head of enforcement for the U.S. Securities and Exchange Commission (SEC), said after Ellison’s guilty plea that he and Wang “actively engaged in a scheme to conceal material information from FTX investors.”
Ellison was also the former CEO of Alameda Research, a sister company of FTX. Prosecutors allege that Ellison funneled FTX client funds into Alameda accounts and concealed risks from clients. Ellison testified against Bankman Freed and was a key witness in his fraud trial.
Prosecutors also revoked Bankman Friend’s house arrest and bail after a judge determined the FTX founder tried to impede Ellison’s testimony last year. Bankman Friend sent messages via Signal and email to FTX’s general counsel in 2023 in an attempt to influence the testimony of Ellison, who was identified only as “Witness 1.”
Nine months later, Bankman Freed showed Ellison’s personal documents to a New York Times reporter in what prosecutors said was an attempt to tarnish her reputation, especially among potential jurors. The judge found that both cases merited Bankman Freed’s arrest and incarceration while awaiting trial. Bankman Freed is currently serving a 25-year sentence in a federal prison in Brooklyn while awaiting an appeal of her conviction.
Mr. Ellison issued a statement before the sentencing, apologizing for his crimes to those he and his former company defrauded. Prosecutors made no sentencing recommendation and said in a memo to the judge that Mr. Ellison’s cooperation with investigators had been “exemplary.”
“Not a day goes by that I don’t think about the people I have hurt,” Ellison said in court. “I am deeply ashamed of what I have done.”
