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Sam Bankman-Fried is currently serving 25 years for one of the biggest financial fraud cases in history.
In a federal court in New York yesterday (24 September), former FTX executive Caroline Ellison was sentenced to two years in prison for her role in Sam Bankman-Fried’s (SBF) theft of more than $8bn from FTX customers.
Ellison, who is Bankman-Fried’s ex-girlfriend, had previously pleaded guilty to seven felony counts of fraud and conspiracy, and testified as a prosecution witness against Bankman-Fried, who was convicted and sentenced to 25 years in prison earlier this year.
Bankman-Fried’s downfall – and that of FTX – was one of the biggest financial fraud cases in US history. It rocked both the financial and crypto worlds when his crimes first came to light following FTX’s swift downfall in 2022. He was arrested in the Bahamas, and quickly made headlines due to the dramatic and audacious nature of his transgressions.
He stole $8bn from FTX customers, while FTX equity investors lost $1.7bn and lenders to Bankman-Fried’s research hedge fund, Alameda, lost $1.3bn.
During Bankman-Fried’s trial, Ellison testified that he directed her and others to use FTX customer funds and carry out riskier transactions via Alameda, purchase real estate and make political donations.
During the sentencing, Ellison apologised to the victims. “Not a day goes by when I don’t think about all the people I hurt,” she said. “On some level, my brain can’t even comprehend the scale of the harm that I caused.”
However, ruling judge Lewis A Kaplan said that he was not comfortable with her remorse being a “get out of jail free card”.
“This was, if not the very greatest financial fraud ever perpetrated in this country or anywhere else, close to it,” Kaplan said.
Ellison’s two-year prison sentence is significantly lower than the maximum she could have been given – 110 years. Judge Kaplan said that he would recommend Ellison to be held in a minimum security prison. “There’s no way you’re ever going to do something like this again, I am persuaded,” he said.
Last week, Bankman-Fried lodged an appeal, criticising Kaplan and claimed that his rulings were “not just erroneous but unbalanced”. And as part of the appeal, Bankman-Fried is seeking a new trial with a new judge.
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