Caroline Ellison, former CEO of Alameda Research, has officially started her two-year prison sentence at a federal facility in Danbury, Connecticut, for her involvement in the 2022 collapse of FTX.
The 30-year-old was sentenced after pleading guilty to charges related to the fraudulent activities that led to FTX’s downfall, resulting in significant financial losses for creditors. Ellison agreed to cooperate with authorities, providing key testimony against Sam Bankman-Fried, the founder of FTX and her former partner.
During her sentencing in September, Ellison expressed deep remorse, stating, “I’m deeply ashamed for my role in this.” Judge Lewis Kaplan took note of her cooperation, emphasizing that her testimony had been crucial in securing Bankman-Fried’s conviction.
As the head of Alameda Research, a trading firm closely connected to FTX, Ellison was responsible for managing substantial customer funds, which were ultimately misappropriated for high-risk investments, political donations, extravagant purchases, and even alleged bribery. These financial missteps were central to FTX’s dramatic collapse in late 2022.
Although her defense team had sought to avoid prison time, Judge Kaplan determined that a sentence was necessary to demonstrate the severe consequences of large-scale financial crimes.
Earlier this year, Bankman-Fried, who chose to go to trial and did not cooperate with prosecutors, was convicted of seven counts of fraud and sentenced to 25 years in prison.
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