Alameda Research CEO Caroline Ellison was sentenced to two years in prison in a New York court on Tuesday. She was also ordered to forfeit $11 billion for her role in the exchange’s collapse.
Background
- A month after FTX collapsed, Ellison reached a plea deal with prosecutors
- At the time, she pleaded guilty to conspiracy and financial fraud charges
- Contrarily, Bankman-Fried trod on the trial path and was convicted of all criminal fraud charges against him
- He was also ordered to pay $11 billion in forfeiture by Judge Lewis Kaplan
- Two other FTX executives, Gary Wang and Nishad Singh also have their sentencing lined up for later this year
- Even they pleaded guilty instead of choosing to contend at trial
Details
- The judge allowed Ellison to remain free on bail until she surrenders either on or after Nov. 7
- Despite her cooperation with authorities, she was sentenced by the judge to discourage other potential bad actors from committing similar crimes
- Ellison could have faced 110 years in prison for her crimes
- The judge, however, sympathized with her
- He said, “You’re a very strong person, Ms. Ellison, in some ways, but not inviolable. Mr. Bankman-Fried had your Kryptonite. You were vulnerable and you were exploited”
- Former FTX executive Ryan Salame, on the other hand, seems to be on a different page
Why should you pay attention?
- Kaplan was pleased with Ellison for providing prosecutors with seven fake spreadsheets, which he deemed “one of the huge pieces of evidence in the case” against Bankman-Fried
- He asserted that “It didn’t work out so well” for Bankman-Fried, in part because Ellison cooperated
- Kaplan also said that the FTX case is probably the greatest financial fraud in the history of the US
- Retrospectively, it didn’t make sense for him to agree to a “literal get-out-of-jail-free card”
- Community members have didn’t shy away from calling Ellision out for redeeming the “snitch discount”
- Salame said, "Snitch is one thing, completely fabricating stuff and lying about other stuff is next level brilliant"
Who said what?
- Ellison’s attorney, Anjan Sahni, urged the judge to give Ellison a second chance
- Sahani asserted that she has “recovered her moral compass” and “profoundly regrets” not leaving FTX and Bankman-Fried’s orbit
- Judge Kaplan said,
“I’ve seen a lot of cooperators over the years and I’ve never seen one quite like Miss Ellison”
- He also hinted that he believed that Ellison was genuinely remorseful for her crimes
- While reading a statement in a shaky voice, Ellison cried several times
- She kept apologizing to the people she had hurt and underlined that she was deeply ashamed
- She regretted not being brave enough to walk away from FTX and Bankman-Fried
Zooming out
- SBF’s doctors recently said that his ADHD and autism resulted in him being misunderstood at trial
- Parallelly, his lawyer recently expressed his disappointment with the way his case was handled by Judge Lewis Kaplan
- He has filed an appeal and requested for a new trial
- Meanwhile, the exchange’s lawsuit — set into motion by the US Commodity Futures Trading Commission [CFTC] — was recently wrapped up after almost a year and a half when FTX agreed to a $12.7 billion settlement
