Caroline Ellison, who as a former confidante played a key role in the conviction of former cryptocurrency entrepreneur Sam Bankman-Fried, is to spend two years in prison. She herself had hoped to avoid prison.
But from Judge Lewis Kaplan’s perspective, a suspended sentence alone would not have been a sufficient deterrent for others.
25 years in prison for Bankman-Fried
Bankman-Fried, the founder and head of the collapsed digital currency exchange FTX, was sentenced to 25 years in prison for fraud this spring. He appealed the sentence. Ellison was part of Bankman-Fried’s inner circle of confidants and was therefore able to provide investigators with inside information that seriously incriminated him. The fact that the two had been together for some time added to the tension in the courtroom. Ellison showed deep remorse during the trial and was unable to hold back tears on several occasions.
FTX, one of the largest trading platforms for cryptocurrencies such as Bitcoin, crashed spectacularly in late 2022. Bankman-Fried was arrested in the Bahamas and extradited to the United States.
Bankman-Fried was accused of embezzling client assets. He was also behind a hedge fund called Alameda Research that made risky trades and borrowed money from FTX. Collateral should have been put up. There were also computer systems that were supposed to do this. But this software made a secret exception for Alameda. This allowed the hedge fund to go as deep as it wanted on FTX. When the Alameda deals went wrong, there was a billion dollar hole in FTX’s coffers.
Ellison was the head of Alameda Research, but stressed that Bankman-Fried was ultimately in charge. Prosecutors also stressed their cooperation during the trial.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
