Caroline Ellison, the former CEO of Alameda Research and a key witness in the case against FTX founder Sam Bankman-Fried, was transferred to federal prison in Connecticut on Thursday.
FTX Penalties
In September, the court sentenced Ellison to two years in prison and ordered the seizure of $11 billion for his role in the billion-dollar fraud. This scam brought down the cryptocurrency exchange, which was once worth $32 billion.
The crash in November 2022 cost cryptocurrency investors sleepless nights. Investors who suffered huge losses did not believe that SBF and its accomplices would receive the punishment they deserved. At least some of the investors were desperate at this point. But all those responsible were held accountable before the judge.
Judge Kaplan opted for a prison sentence despite requests from Ellison’s defense attorneys. Kaplan credited Ellison’s cooperation with prosecutors with being invaluable in Bankman-Fried’s conviction.
Ellison’s Role at FTX
While Caroline Ellison was president of Alameda Research, she was at the center of the crime of secretly taking $8 billion from FTX customers and diverting them to high-risk transactions and other business activities. This money belonged to customers who deposited money on the FTX exchange to trade.
“Ellison is unlike any collaborator I have seen over the years.” – Judge Kaplan.
Kaplan stated that Ellison shed tears of regret in court and that he could not give up his position at FTX because of his relationship with Bankman-Fried.
FTX Case and SBF
Bankman-Fried rejected the plea deal and opted to go to trial and was convicted of seven fraud charges earlier this year. Judge Kaplan sentenced Bankman-Fried to 25 years in prison and ordered the return of $11 billion.
Kaplan also gave the US government until January 15, 2025 to negotiate the return of $13.25 million in FTX-related donations to pro-Democrat PACs.
Ellison’s start of serving his prison sentence is seen as one of the most important steps in the collapse of FTX. This development created a stark contrast to those who turned 2022 into a nightmare as BTC lingered at all-time record levels.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
