Caroline Ellison has been sentenced to two years in prison for her involvement in the collapse of the cryptocurrency exchange FTX, one of the most significant financial frauds in U.S. history. At 29, Ellison was a top executive at FTX and had a personal relationship with its founder, Sam Bankman-Fried, who is currently serving a 25-year sentence for embezzling over $8 billion from customers.

Ellison pleaded guilty to multiple charges, including wire fraud and money laundering, and cooperated with prosecutors by testifying against Bankman-Fried. In addition to her prison sentence, she was ordered to forfeit more than $11 billion to the court, with potential additional restitution obligations.

Initially facing a sentence of 110 years, her term was significantly reduced due to her cooperation. Judge Lewis Kaplan commended her assistance, describing it as “remarkable,” but noted her serious culpability in the crimes. Ellison expressed deep regret during her court statement, admitting difficulty comprehending the harm caused.

FTX, founded in 2019, quickly became the third-largest cryptocurrency exchange, valued at $32 billion at its peak. However, in 2022, financial instability led to a run on deposits and the company’s eventual collapse, revealing widespread fraudulent practices.

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Bankman-Fried was convicted of wire fraud and conspiracy to commit money laundering, having misused customer funds for personal investments and other expenditures. Ellison, who worked closely with him at FTX and Alameda Research, testified against him during a high-profile trial, describing how she was directed to use customer funds without consent.

Her cooperation with prosecutors included multiple meetings to assist in detailing FTX’s financial downfall and building the case against Bankman-Fried. While her legal team argued for leniency based on her collaboration, the U.S. Attorney’s Office acknowledged her extraordinary cooperation and genuine remorse but did not recommend a specific sentence.

Ellison’s sentencing follows that of Ryan Salame, co-CEO of FTX’s Bahamian subsidiary, who received a 90-month prison term earlier this year for campaign finance violations and operating an illegal money-transmitting business.

Source: blockchaintechnology-news.com

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