FTX case: Caroline Ellison’s role in the fraud and why she will spend 2 years in prison

What was Caroline Ellison’s role in the FTX fraud?

Caroline was of paramount importance in the case, as she was the star witness at the trial, confessing to the jury that they stole “about 14 billion” from the clients of the FTX cryptocurrency platform before it went bankrupt last year.

The money, according to testimony, was used to prop up Alameda Research, Bankman-Fried’s personal hedge fund for which he had tapped Ellison as chief executive.

Ellison, according to legal documents, was completely forthright during her meetings with the government. That’s why her prison sentence was so light compared to Sam Bankman, who received a 25-year prison sentence.

However, the judge in the case noted that his punishment was based on the fact that the FTX fraud was one of the largest in U.S. history, so his sentence was meant to serve as a deterrent to other potential bad actors.

“I’ve seen a lot of cooperators over the years, but never one like Ms. Ellison,” said the judge in the case, Lewis Kaplan, who also noted that he believed Caroline was genuinely remorseful for her crimes, as well as the emotional impact her cooperation had on her.

Ellison has been working with John J. Ray, FTX’s new chief executive, to locate and recover client assets, according to a statement from Ray filed by Caroline’s defense.