Caroline Ellison, star witness in FTX crypto fraud trial that put SBF away for 25 years, is sentenced to 2 years in prison

Caroline Ellison, a key witness in cryptocurrency mogul Sam Bankman-Fried’s multibillion-dollar fraud trial, was sentenced to two years in prison on Tuesday in U.S. federal court.

The 29-year-old apologized for any harm she did, saying, “I’m deeply ashamed with what I’ve done.”

U.S. District Judge Lewis Kaplan called Ellison’s cooperation “very, very substantial” and praised her testimony, but said her prison sentence was necessary given the magnitude of the wrongdoing, which he called the “greatest financial fraud ever perpetrated in this country and probably anywhere else.”

Ellison is the former CEO of Alameda Research, a crypto hedge fund that was connected to Bankman-Fried’s FTX cryptocurrency exchange. Bankman-Fried, who is commonly referred to by his initials, SBF, was both Ellison’s boss and “off-and-on boyfriend.” In March, he was sentenced to 25 years in prison.

Ellison’s testimony against the former FTX head was considered a cornerstone of his fraud trial. “I’ve seen a lot of cooperators in 30 years here. I’ve never seen one quite like Ms. Ellison,” Kaplan told the court.

Ellison must now report to prison on November 7. She had pleaded guilty to wire, securities, and commodities fraud, as well as money laundering.

Ellison reportedly was also ordered to forfeit $11 billion that was earned from her time at FTX.

Over the course of the trial, Ellison said she helped SBF knowingly defraud investors. She testified that “Alameda took several billion” of FTX customer funds for its own investments and to repay lenders. She also testified that her understanding from SBF was that Alameda could take money from FTX for “whatever we needed it for.”

Ellison said she committed crimes at the behest of Bankman-Fried, but argued she was not aware of the full extent of the fraud.