Caroline Ellison Begins Two-Year Prison Sentence for FTX Fraud

Caroline Ellison, the former CEO of Alameda Research, has reported to the federal prison in Danbury, Connecticut, today to begin her two-year sentence. The 30-year-old played a role in the fraud that brought down FTX in 2022, which caused huge financial losses for creditors. Ellison was sentenced in September after she pleaded guilty and agreed to testify against Bankman-Fried, her former boyfriend and the founder of FTX. During her sentencing, Ellison tearfully said, “I’m deeply ashamed for my role in this.” 

Judge Lewis Kaplan acknowledged her willingness to cooperate and noted that her testimony was essential in securing Bankman-Fried’s conviction. As former CEO of Alameda Research, a trading firm tied to FTX, Ellison was responsible for managing billions in customer funds, which were eventually misused for risky investments, political donations, luxury spending, and even alleged bribes.

These actions eventually led to FTX’s dramatic collapse in late 2022. Despite requests from her legal team for no prison time, Judge Kaplan said that the prison time was necessary to show that large-scale financial crimes have serious consequences. Bankman-Fried, who did not cooperate with prosecutors and went to trial, was found guilty of seven counts of fraud and sentenced to 25 years in prison early this year.