Caroline Ellison, the Former CEO of Alameda Research, Sentenced For Two Years In Prison

On Tuesday, a federal judge sentenced former Alameda Research CEO Caroline Ellison to jail for 24 months or two years.

The judge stated that Ellison, 29, may serve her sentence in a minimum-security jail close to Boston, where her family resides. She will also have to return almost $11 billion. After serving her sentence, she will be released under supervision for three years.

Judge Lewis A. Kaplan expressed sympathy for Ellison despite the sentence; Ellison was a crucial witness in the government's trial of Sam Bankman-Fried, the CEO and founder of FTX and a former boyfriend of the prosecution. A few minutes before he announced his punishment, he stated, “You were vulnerable, and you were exploited.” “You are genuinely remorseful.”

“I've seen a lot of cooperators in 30 years here, but I've never seen one quite like Miss Ellison,” Kaplan remarked in acknowledgment of Ellison's collaboration.

However, he pointed out that FTX was among the worst financial scams ever carried out in this nation, and Ellison's assistance was insufficient to keep him out of jail. Kaplan stated, “In a case, this serious, to be a ‘get out of jail free' card is not something I can see my way through to,” before requesting that Ellison stand and accept her 24-month prison term. Ellison will serve at least 75% of her sentence before becoming eligible for release because the offense is federal.

During Bankman-Fried's criminal trial last year, Ellison testified against him, claiming he attempted to bribe foreign officials and purposefully provided lenders with false financial information.

In a sentencing memo before Tuesday's hearing, the prosecution stated that her evidence served as a “cornerstone” for Bankman-Fried's conviction. Earlier this year, Bankman-Fried was found guilty on all seven counts of fraud and conspiracy against him and received a 25-year sentence. He is currently contesting the verdict. During her remarks before the judge on Tuesday, Assistant U.S. Attorney Danielle Sassoon, who led the prosecution in Bankman-Fried's trial, reiterated this memo.

Anjan Sahni, the managing partner of Wilmer Hale, represented Ellison in court, claiming that his client had been misled by Bankman-Fried, with whom she had once had a sexual involvement. Ellison engaged in the scam because she wanted to please Bankman-Fried, but after FTX failed, her attorney said that “she has recovered her moral compass.”

Before the sentence was read aloud, Ellison gave a brief speech in which she expressed her desire to apologize to FTX and Alameda's former clients and her former coworkers, friends, and family.

She responded, trembling, “The human brain is bad at comprehending big numbers.” “I can't even begin to imagine the pain I've caused.”

Before Ellison must willingly turn herself into the Bureau of Prisons to start serving her sentence, she has around forty-five days left.