Caroline Ellison breaks down in tears as she is sentenced to two years in prison for her role in FTX collapse: ‘I’m sorry I wasn’t brave’
On Tuesday, former FTX CEO Caroline Ellison standing at the podium on the 21st floor of the Manhattan courthouse, her voice choked as she asked the judge to reduce her sentence. Her parents and two younger sisters watched her speak in court.
“My brain can’t even comprehend the pain I’ve caused,” Ellison said through tears. “That doesn’t mean I haven’t tried.”
Despite Ellison’s plea to avoid prison, with prosecutors acknowledging her extensive cooperation in building the case against Ellison’s ex-boyfriend, Sam Bankman-Fried, Judge Lewis Kaplan sentenced her to two years in federal prison.
Ellison will begin serving her sentence in early November and will be placed in a minimum-security prison, with Kaplan approving her request to serve her sentence at a facility closer to her family in Boston.
Bankman-Fried is her ‘Kryptonite’
Ellison’s downfall has been a subject of intense scrutiny over the past two years, as public attention has focused on the collapse of FTX, a company once valued at $32 billion, and its group of 20- and 30-something executives, many of whom had dated or considered each other close friends.
Ellison entered Bankman-Fried’s orbit as a trader at his hedge fund Alameda Research when she was just 24, and soon became its CEO. As she acknowledged during three days of emotional testimony at Bankman-Fried’s trial last fall, she also played a key role in the fraud that brought down the empire, with FTX diverting billions of dollars in client assets to fund disastrous trades at Alameda, along with luxury real estate, illegal campaign donations, and venture capital investments.
On Tuesday, Ellison again admitted that she should have stopped the fraud sooner, but she couldn’t, drawn in by what she described as Bankman-Fried’s admiration—and often unrequited love. “I’m sorry I wasn’t brave,” she said.
Despite her role in what Kaplan described as “the largest financial fraud ever committed in this country,” both Ellison’s attorneys and prosecutors have emphasized her work with the government and bankruptcy firm FTX to recover assets for clients and build the case against Bankman-Fried. Assistant U.S. Attorney Danielle Sassoon argued that Ellison deserved a light sentence because of her cooperation.
After a lengthy monologue praising the history of sentencing guidelines, Kaplan praised Ellison’s work with prosecutors, saying he had “never seen [a cooperator] quite like Ms. Ellison,” with her testimony at the Bankman-Fried trial being free of errors or inconsistencies.
However, he still wonders why she took such a dark path, contemplating that Bankman-Fried was her “weak point.”
His two-year prison sentence was much harsher than what Ellison’s attorney and probation service recommended, although she is unlikely to serve the full term.
She will also have to enter into a waiver process that will result in any money recovered from the fraud being distributed to victims of FTX’s collapse. Ellison kept the bulk of her savings in FTX and has made no effort to recover any of it, and has already given up her largest holding—a $10 million investment in AI giant Anthropic. She has also agreed to share any money she makes from telling the story of her role at FTX, according to her attorney, so she cannot profit from her time at the crypto empire.
Bankman-Fried was sentenced to 25 years in prison in March, and former FTX CEO Ryan Salame received 7.5 years in May after pleading guilty but deciding not to cooperate with prosecutors. Two other insiders, Nishad Singh and Gary Wang, are still awaiting sentencing.
