Alameda CEO Sentenced to Two Years in Prison After Recognizing Former Boyfriend SBF

The CEO of Alameda Research, a sister organization of the now-defunct exchange FTX, Caroline Ellison, was sentenced to two years in prison last Tuesday, 9/24, for involvement in financial crimes with her ex-boyfriend, SBF. Despite Ellison's active cooperation with the prosecution, legal experts were surprised by her sentence, as they had initially predicted she might completely avoid imprisonment.

Judge Sentences to 24 Months in Prison

According to Bloomberg, New York federal judge Lewis Kaplan sentenced 29-year-old Ellison to 24 months in prison. In December 2022, Ellison pleaded guilty to multiple charges, including wire fraud and conspiracy to launder money, similar to the charges faced by SBF. Although Ellison will serve time, she can choose to serve in a minimum-security prison.

The judge highly praised Ellison's cooperation as a witness, calling her the "most powerful cooperating witness" he had ever seen. However, the judge described SBF as Ellison's "Achilles' heel" Kryptonite, the extraterrestrial mineral Superman fears most. SBF pleaded not guilty to the charges and was sentenced to 25 years in prison in a criminal trial in March of this year.

Many legal experts believe that due to Ellison's cooperation, she may be completely exempt from imprisonment. Last week, the prosecution expressed support for a lenient sentence but did not provide specific recommendations. Ellison's lawyer argued for a three-year probation sentence to spare her from incarceration.

After Alameda and FTX Collapse: A Sigh of Relief

Ellison previously served as the CEO of Alameda Research, a company related to the FTX cryptocurrency hedge fund. The closure of Alameda involved losses of FTX client funds, ultimately leading to the bankruptcy of both companies and the arrest of key executives, including Ellison and SBF. In court, Ellison expressed regret for her role, stating, "I was involved in a criminal conspiracy that ultimately stole hundreds of millions of dollars from those who trusted us and entrusted their funds to us." She also expressed that full cooperation with the investigation was a "relief" for her.

Reflecting on her career before its downfall, Ellison had advice for her younger self when applying for Forbes' 30 Under 30 list in 2021:

I would tell her to take fewer risks and believe in herself more.