Caroline Ellison Sentenced to 2 Years, Dubbed “Queen of the Rats”
Caroline Ellison, the former CEO of Alameda Research and a key witness in the trial of FTX founder Sam Bankman-Fried, has been sentenced to two years in prison, followed by three years of supervised release. During this period, she must cooperate with the U.S. Securities and Exchange Commission (SEC). The court also ordered her to pay an $11 billion fine and forfeit her assets.
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Caroline Ellison, the former CEO of Alameda Research and a key witness in the trial of FTX founder Sam Bankman-Fried, has been sentenced to two years in prison, followed by three years of supervised release. During this period, she must cooperate with the U.S. Securities and Exchange Commission (SEC). The court also ordered her to pay an $11 billion fine and forfeit her assets.
Ellison was visibly distressed throughout the final hearing, frequently breaking into tears, including during her closing remarks. Her defense strategy focused on her relationship with SBF, claiming that her infatuation led her to make unethical decisions to gain his approval, which he allegedly exploited. She also expressed deep regret for the harm caused by the FTX collapse and shame for the affected investors.
Caroline Ellison outside the courthouse. Source: nypost
The lawyer also presented a letter in court from Caroline’s mother Sara Fisher Ellison, a Senior Lecturer in the MIT Department of Economics. In the letter, she mentioned that her daughter wrote a “charming novella set in Edwardian England and loosely based on her sister Kate’s imagined amorous exploits.”
While Ellison’s literary skills may have softened the court’s view, the real turning point came from another factor.
In his remarks, Judge Lewis Kaplan repeatedly highlighted the invaluable assistance Ellison provided in the investigation of the exchange’s fraudulent activities. He even noted that in his 30 years on the bench, he had never encountered a suspect so willing to cooperate with the authorities.
He also observed that Caroline’s remorse appeared genuine, in stark contrast to SBF, who seemed more concerned about being caught than showing any real signs of guilt.
Judge Lewis Kaplan. Source: watcher.guru
Crypto blogger Tiffany Wong remarked that the judge’s description clearly establishes Caroline Ellison as the “Queen of the Rats.”
It seems this title is well-earned.
For context, Ryan Salame, head of FTX's Bahamas subsidiary, was sentenced to 7.5 years in prison in May 2024, despite the fact that his only crime was diligently following orders from Sam Bankman-Fried and Ellison. However, Salame refused to cooperate with the investigation or testify against his superiors. It appears the court favors those who play along and disapproves of those who don’t.
FTX's Former Executive Ryan Salame. Source: CNN
It’s worth noting that Ellison’s sentence has not yet been enforced, and she remains free on bail. The sentence is set to take effect on November 7, 2024, when she will begin serving her time in a Boston prison. The judge insisted that Caroline and Sam be kept as far apart as possible.
FTX founder Sam Bankman-Fried was sentenced to 25 years in prison and is serving his sentence in a San Francisco prison.
While Ellison prepares herself for life behind bars, other defendants in the high-profile FTX fraud case await their sentences. Former top executives of the exchange, Nishad Singh and Gary Wang, both of whom have pleaded guilty to all charges, will be sentenced on October 30 and November 20, respectively.
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