Caroline Ellison, the former business partner and girlfriend of cryptocurrency fraudster Sam Bankman-Fried, has been sentenced to two years in prison for her role in one of the biggest financial frauds in history.
Ellison, the CEO of Alameda Research and Bankman-Fried’s on-and-off girlfriend, was a key prosecution witness in last year’s trial that saw the founder of ill-fated crypto exchange FTX sentenced to 25 years in prison.
Ellison pleaded guilty to seven charges, including fraud, shortly after the collapse of FTX in 2022, crimes carrying a maximum sentence of 110 years in prison.
But both the judge and prosecutors said that Ellison deserved leniency for cooperating with investigators, including testifying against Bankman-Fried over the course of three days at his trial.
United States District Judge Lewis A Kaplan said on Tuesday that Ellison’s cooperation had been “very substantial”, but a prison term was justified despite her lawyers’ request for a non-custodial sentence given the magnitude of the fraud.
“There’s no way you’re ever going to do something like this again, I am persuaded,” Kaplan said.
“But here’s the thing: this was, if not the very greatest financial fraud ever perpetrated in this country or anywhere else, close to it.”
Kaplan said he would recommend that Ellison be held in a minimum-security prison.
During Bankman-Fried’s trial, Ellison testified that he directed her and others to dip into FTX customers’ funds to carry out riskier transactions via sister company Alameda Research, buy real estate and make political donations.
Bankman-Fried testified in his own defence at his trial, accusing Ellison of being a bad manager and casting himself as a well-meaning entrepreneur and altruist who was out of his depth.
Bankman-Fried earlier this month filed an appeal against this conviction on seven fraud and conspiracy charges, accusing the judge of blocking his legal team from introducing evidence that would have helped his defence.
