Crypto CEO and Bankman-Fried ex Caroline Ellison gets two-year sentence

CAROLINE Ellison, who testified against her former boyfriend and FTX founder Sam Bankman-Fried at his crypto fraud trial, was sentenced on Tuesday to two years in prison for her role in the case, New York prosecutors told AFP.

Ellison, the former CEO of cryptocurrency firm Alameda Research, received a much lighter sentence than the maximum 110 years she faced after pleading guilty to seven charges, including fraud.

Her defence team had argued against prison time. Prosecutors with the Manhattan District Attorney’s Office said they had not requested Judge Lewis Kaplan issue a specific sentence, instead simply suggesting he take her earlier cooperation into account.

Ellison served as a key witness in the trial of cryptocurrency superstar Bankman-Fried – known by his initials “SBF” – who was sentenced to 25 years in March for one of the largest financial fraud cases in history.

He is serving his sentence in prison and has appealed his conviction.

During her court testimony, Ellison accused Bankman-Fried of dipping into customers’ funds to drive his riskier projects. He countered by attempting to pin the blame on Ellison, describing her as a bad manager.

A billionaire before he turned 30, Bankman-Fried had been a poster boy for the cryptocurrency boom.

Within the span of a few months, he had turned his small start-up FTX, first launched in 2019, into the world’s second largest cryptocurrency trading platform.

However, as exposed by the Bankman-Fried trial, the company had used the assets deposited into FTX to perform riskier transactions via sister company Alameda Research, as well as purchase real estate and make political donations.

FTX imploded in November 2022, reporting more than US$8 billion in debt by the time the company filed for bankruptcy. AFP